MANILA – Finance secretary Carlos Dominguez III said he is open to inputs from stakeholders regarding tax reform as long as the target deficit ceiling is not compromised.
“We will not prejudice the entire economy by exceeding 3 percent or around that area,” Dominguez said during the 2018 EJAP Economic Forum in Manila City.
He was asked what the Department of Finance (DOF) would consider as non-negotiable while congressional hearings on the administration’s tax reform are ongoing.
For his part, Budget secretary Benjamin Diokno said the economic managers are committed to maintain the budget deficit at 3 percent of gross domestic product (GDP).
“We won’t allow the deficit to increase further to 4 percent. I think that should be a welcome message to foreign investors,” Diokno said.
Duterte’s economic managers have raised the 2019 deficit ceiling to 3.2 percent of GDP.
On Sunday, the DOF said it has submitted the remaining tax reform packages to Congress and would like to have them passed into law by the end of 2018.
The three additional packages submitted to Congress include the following:
Package 2+: Increasing excise taxes on tobacco and alcohol products and increasing the government’s share from mining
Package 3: Reforming property taxation to make the valuation system “more equitable, efficient, and transparent”
Package 4: Rationalizing capital income taxation to address multiple rates and various tax treatments and exemptions on capital income and other financial instruments
These are on top of the first package, or the Tax Reform for Acceleration and Inclusion (TRAIN) Act that President Rodrigo Duterte enacted into law last December.
TRAIN1B, which contains the proposed tax amnesty program and adjustments in the Motor Vehicle Users Charge (MVUC), is also pending before Congress.
Despite the non-negotiable deficit ceiling, Dominguez noted the inputs from stakeholders must be able to improve the proposals submitted to Congress.
“In a democracy, many people have different ideas, so we must listen to all the different ideas that are out there,” he said. (GMA News)
