• Former gov’t execs favor DOF tax plan

Former government officials are supporting the original version of the tax reform bill as proposed by the Department of Finance (DOF) in order to ensure enough revenues will be generated to fund the government’s public investment programs.

During a recent hearing of the Senate Ways and Means Committee, former finance undersecretary Romeo Bernardo asked the Senate to preserve the original provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) bill as proposed by the DOF.

He said there is a need to maintain the expected revenue impact of the bill, more so now that the government is facing increasing burden such as the provision of free tuition to students of state universities and colleges, pension for uniformed personnel, and the increased social security benefit for retirees.

Margarito Teves, a former finance chief, also underscored the importance and urgency of passing the TRAIN in its original form to enable the government to finance the growing needs of the country, while maintaining the fiscal deficit ceiling of three percent of gross domestic product.

Former finance secretary Roberto de Ocampo also said he is supporting the original form of the Tax Reform for Acceleration and Inclusion Act as this would improve tax compliance, bring in more investments and create jobs.

Meanwhile, former socioeconomic planning secretary Felipe Medalla, currently member of the Monetary Board, said the TRAIN is necessary to maintain the level of the country’s debt in relation to its GDP.

Furthermore, he said tax reform bill would shift the burden of paying income taxes from salaried workers to the rich.

The original proposal of the DOF, which contains the first package of its Comprehensive Tax Reform Program, aims to simplify the country’s tax system by lowering personal income tax rates. It also seeks to adjust excise taxes of fuel and automobile and expand the tax base by removing value-added tax exemptions.

The DOF said its original proposal has an estimated net revenue gain of P157 billion. On the other hand, the House of Representatives-approved version is seen to yield P134 billion, while the Senate version is projected to generate P59.9 billion.

Meanwhile, the Foundation for Economic Reform, of which Teves and Bernardo are members, said it also supports the provisions of the tax reform program.

“We particularly support the downward adjustments in the personal income tax on the grounds of fairness. We also strongly back the reduction in the corporate income taxes, which will promote and attract more investments and facilitate job creation,” the FEF said.