Finance Secretary Carlos Dominguez III during the first appropriations committee hearing on the proposed 2017 budget of P3.35 trillion said that the tax reform is necessary.
"The 10-Point Socioeconomic Agenda revolves around the need to maintain sound macroeconomic and fiscal policies, invest in the people, and address the binding constraints to investment and job creation. This is why we need tax reform," he said.
|Photo by Rappler|
“Foregone revenue due to lower tax rates may reach P173.8 billion. Lowering income tax rates will bring down revenues by approximately P139 billion while lowering of corporate income tax rates will bring down revenues by around P34.8 billion." Dominguez added.
To compensate for lost revenue, the government is planning on imposing new taxes such as “sweet tax” on sugary drinks and fatty food.
Dominguez said that the government is also looking to adjust fuel excise tax.
"In our present tax system, the VAT system captures approximately half of GDP and the self-employed easily escape the tax net, largely due to bank secrecy laws," Dominguez said.
"It is a system that causes inequality, economic distortions, and discourages investments." He added.
The tax reform is expected to be presented to Congress in September. MJM
Philippines to lose 200 billiion in Duterte’s tax reform Reviewed by FilipiNews PH on Tuesday, August 23, 2016 Rating: