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Statements/Positions re Comprehensive Tax Reform Package

Statements/Positions
Proponents
DOF Sec. Sonny Dominguez The tax reform would be the linchpin of a broader reform
package envisioned by the new government to attack
generational poverty, restore peace and order, curb armed
insurgencies and transform the Philippines into a high middle-
income state by the end of the Duterte presidency.

Philippine Chamber of We are in favor of it. Because if you look at spending as a
Commerce and Industry percentage of GDP both in education, health services and
President George Barcelon infrastructure, we’re behind other countries. So for us, it’s an
investment.

World Bank Country The tax reform package is a possible “game changer” that could
Director for the Philippines improve transparency, tax administration efficiency and the
Mara Warwick expansion of the tax base.

Philippine Stock Exchange The market’s breach of the 8,000 level can be attributed to the
President Ramon Monzon optimism over the developments in the Department of Finance’s
comprehensive tax reform program.

Moody's Investors Service House approval of HB 5636 will boost the Philippines’ credit
rating because it will provide government with a fresh revenue
stream and showed it can put reforms in place despite political
controversies.

Fitch Ratings HB 5636 should widen the tax base and boost revenue and
demonstrates the administration's commitment to broader tax
reforms that have the potential to improve fiscal stability and
support an ambitious public investment program.

Deutsche Bank Beyond its fundamental economic benefits, (the tax reform bill’s)
passage would send investors a strong signal that the
administration has the political will to pass unpopular laws to
institute long-term structural economic reforms.”

Stiff Opponents
Bayan Muna Rep. Isagani  Reforms tied with the restructured income brackets, like the
Zarate increase in excise taxes and the expansion of VAT (value-
added tax) bases, have ironically made the poor pay more.

 Removing VAT exemption for rental rates below P10,000
would mean that the renters would have to pay an additional
12 percent on their rental fees.

 These subsidies. of The tax reform bill is deceptive. Senator Juan Miguel Zubiri  The tax package is a bit controversial because they’ve included an increase of the excise tax on fuel. according to our research and computation.  The process and discretion of disbursing the funds could be Ariel Casilao subject to abuse by persons in authority. and transportation. there is more reason for us to pursue our standing proposal to President Duterte to give P500 monthly cash subsidy for minimum-wage workers to cope with the impending rise of prices of goods and services to be created by the tax measure. Once Philippines (ALU. which will impact a lot on everyone. These major items include: . With Reservations Senate Minority Leader I don’t think it will be possible for the administration to get it (tax Franklin M.Rep. Drilon reform bill) through this year in the time we have left.9% growth rate right now with what we have. among others. Anakpawis Partylist Rep. Before we start imposing Negros Occidental additional taxes. Such a social benefits card cannot be insulated from politics.  The public would also be made to wait before they could enjoy the benefits of the card. food. services. not just the richest of society but also the poorest of the poor. similar to the government’s conditional cash transfer program. approved around 30-million workers will become poorer. we should first improve our collection on present taxes and duties due the government. so maybe it’s not necessary to rock the boat in terms of tax reforms. DSWD Secretary Judy  The DSWD has reservations concerning two major items in Taguiwalo the tax reform package believing that such will likely result in the increase in prices of consumer goods. will not have that big relief on the people who will be affected by the general increase in prices of goods and services. Gary Alejano  It is very doubtful that the social benefits card proposed in the tax reform bill could be implemented efficiently. Associated Labor Unions. Magdalo Rep. TUCP) Spokesperson Alan Tanjusay  With the approval of the Lower House. Arnulfo Teves Jr.  The new tax reform package approved by the Lower House Trade Union Congress of the will send millions of workers deeper into poverty.  We’re achieving 6.

farmers and fisherfolk who do not pay personal income tax will not benefit from the tax reform program. 1) the proposal to expand the VAT on the sale of services and use or lease of properties. . Navotas Rep. which appears to be the foundation upon which the new social benefits program will be built. and 2) the imposition of the higher excise tax on oil and gasoline products. Deputy House Speaker Miro  The benefits from decreasing personal income tax are Quimbo negated by the increase in other taxes. and only highlights the importance of a timeline for the program’s implementation in the proposed TRAIN bill. but will be hit hard by the increased cost of fuel and other consumer goods. Re Social Benefits Program  HB 5636 does not go into the specifics of what mechanism would be used to implement the program. Comprehensive Tax Reform: Issues and Concerns 1. liquefied petroleum gas and diesel would hurt them. already has its own issues with implementation and has been criticized for inefficiencies.  The 4Ps.  The minimum wage workers.  High prevalence of 4Ps beneficiaries pawning in their cash cards to loan sharks to advance their monthly stipend.  To counter this. DoF is eyeing government biometric-capable identification cards for use as social benefits card for people who will be given unconditional cash transfers under the new tax reform. getting these into the hands of all the targeted beneficiaries is a time-consuming task within itself.  DSWD is also not in favor of the planned one-year unconditional cash transfer as cushion to the commodity and public utility price increases brought about by the two general tax increases. Toby Tiangco The cut in personal income taxes would help the middle and lower class but new excise taxes on kerosene.  While biometric IDs are an ideal solution.  does not mention the amount of the cash transfers  the criteria for qualifying as a beneficiary  a timeline for its implementation.

com/content. who do they pass the tax burden to: the DSWD or the Pantawid beneficiaries? 2. Taguiwalo said that the Finance department’s proposed P300 a month targeted transfer -.mb.bworldonline.com/content.net/898584/2-solons-drop-support-for-tax-reform- package#ixzz4jwOG3gJE http://www.bworldonline.ph/government-told-to-start-working-on-tax-reforms-safety-net/ http://news.html http://newsinfo.businessmirror.inquirer. DSWD also asks: What is the proponents’ definition of “money remittance centers”? Would it include our Pantawid Pamilyang Pilipino Program bank conduits? If so.net/2017/03/14/dswd-opposes-anti-poor-provision-under-tax- reform-package/ http://thestandard. saying that administrative problems will contribute to the backlog.php?section=Economy&title=dswd- says-cash-transfers-under-tax-plan-not-enough&id=142260 http://www.  There will be a time lag before the cash transfers are received by the beneficiaries. Re Revival of Pantawid Pasada Program  DSWD Secretary Judy M.is insufficient to protect the marginalized.which is valid for one year -.com. http://www.ph/news/national/238258/angara-tells-palace-don-t-set-us-up-for- failure.canadianinquirer.com.  Inflation in the past eight years has already eroded the real value of the cash grants.ph/2017/05/08/tax-reform-package-facing-opposition/ http://newsinfo.inquirer.php?section=Opinion&title=in-tax-reform-addressing- ambiguities-in-social-benefits&id=146361 http://www.com.  On the money remittance centers’ VAT.net/898584/2-solons-drop-support-for-tax-reform- package#ixzz4jwPw03I4 .