ASEAN KEY DESTINATIONS
Tax reform to end decades of 'unjust' taxation, says DOF
The proposed tax reform program of the Duterte administration is seen to end decades of "unjust" taxation and shift the tax burden to the ultra rich from the lower income majority of the population, Finance Secretary Carlos Dominguez III claimed on Wednesday.
"The reform package will end decades of unjust taxation that polarized wealth rather than distributed it. It will help us build a robust middle class to ensure stability and sustainability in our nation’s progress," Dominguez said in his remarks during the Tax Reform Forum in Mandaluyong City.
"The tax reform agenda proposed by the Department of Finance is designated to shift the tax burden from the lower 99 percent of the community to the wealthiest 1 percent," the Finance chief emphasized.
The first package of the tax reform program, approved by the House of Representatives as House Bill 5636 or the Tax Reform for Acceleration and Inclusion (TRAIN) on May 31, seeks to lower personal income tax rates and, at the same time, adjust excise taxes and expand value added tax base as compensating measures.
HB 5636 is a consolidation of the original tax reform bill – HB 4774 – filed by Quirino Rep. Dakila Carlo Cua, and 54 other tax-related measures.
"The proposed tax reform package will end the complex and vulnerable revenue system we have in place," Dominguez said.
"It will ensure that our tax system is simple, just and efficient. It will ensure government a healthy and recurrent revenue flow to fund education, health and other social services. Our human capital, after all, is our biggest asset," he added.
The proposed reforms in tax policy will help reshape the country's economic growth to make it more inclusive, Dominguez noted. "It will help us end the pattern of wealth concentration that characterized our growth so far," he said.
The ambitious infrastructure program of the administration, which will be funded mostly from revenues generated from the tax reform, will further boost the economy, he said.
"The program will, at the same time, enable us to spur our economic expansion, create jobs through greater investment inflows and bring our far-flung communities to the mainstream of domestic trade," he said.
The tax reform will allow the Philippines to break out from the cycle of moderate growth and achieve a fast-growing, dynamic, and investment-driven economy, according to the Cabinet official.
"This is a conjuncture that allows us to join the ranks of tiger economies. We should not let this historic opportunity pass us," he said.
"If we fail to reform our tax policies at this time, we will miss economic opportunities that may never converge again. On the other hand, if we act promptly and decisively, we will have the means to bring the next generation of Filipinos to prosperity," he said.
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