IMF backs DOF’s tax reform package
The finance department over the weekend said it has received the backing of the International Monetary Fund (IMF) on its planned comprehensive tax reform package, as well as proposals to relax the country’s bank secrecy law.
The Department of Finance (DOF) said the IMF has given its nod to the tax reform plan of the government for being “net revenue positive with due attention paid to equity.”
To recall, President Rodrigo Duterte’s economic team in June presented the administration’s 10-point socioeconomic agenda which includes the implementation of a progressive tax reform seen to increase revenues and lower personal income taxes.
The first package of proposals — reducing the personal income tax (PIT) and expanding the value-added tax (VAT) base — has already been submitted to Congress in September.
“Staff supports the authorities’ push for a comprehensive tax policy reform that is net revenue positive with due attention paid to equity,” the IMF was quoted as saying in its country assessment report for September.
The IMF also expressed its support on the planned amendments to relax the bank secrecy laws to counter tax evasion in the country.
“Staff supports the Department of Finance’s efforts to amend the bank secrecy law to allow the tax authorities access to individual bank account information and make tax evasion a predicate crime for money laundering in order to improve the efficiency and equity of revenue collection,” it said.
The DOF last month said it plans to address tax evasion through administrative measures such as the lifting of the bank secrecy, and the implementation of a presumptive tax policy.
A lawmaker and a Bangko Sentral ng Pilipinas (BSP) official have already signified support for amending the bank secrecy law to allow authorities to scrutinize bank accounts of persons suspected of being involved in crime and fraudulent activities.
Aside from the IMF, several business groups including the Employer’s Confederation of the Philippines, as well as the World Bank have already expressed support on the tax reform plan. —ALG, GMA News
