Duterte admin to lower personal, corporate taxes

Duterte admin to lower personal, corporate taxes

Revenue drop to be offset by getting rid of corruption in BIR, Customs

- in Economy
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@Jon Joaquin

The Department of Finance (DOF) will lower personal and corporate income taxes in order to grow the country’s middle class and energize businesses.

Speaking at the FT-First Metro Philippines Investment Summit held at the Fairmont Hotel in Makati City on Tuesday afternoon, Finance Secretary Carlos Dominguez said the resulting drop in revenues will be offset by broadening the tax base, reforming the collections systems of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), and eliminating graft and corruption on these two agencies.

“I am sure there is a way to keep the budget balanced while growing the middle class,” Dominguez said.

He said measures would be implemented to plug loopholes and make revenue collections more efficient in the BIR’s Large Taxpayers Unit, which is in charge of collecting taxes from the country’s biggest industries.

“If this unit can collect more efficiently, it should be possible to raise enough revenues at least to compensate for the lower tax rates,” he said.

In the BOC, Dominguez said the government would have to upgrade the agency’s capabilities to fight smuggling, which — according to World Bank estimates — denies the government billions of dollars in potential revenues.

He noted that while the past administration succeeded in getting the country out of the boom-and-bust rut and in sustaining quarter-on-quarter growth, it had hesitated in spending what it had borrowed, which resulted in “chronic underspending and a severe shortfall in infrastructure.”

“When our voters cast their votes last May, they delivered a strong message,” he said. “We can no longer do business as usual. We have to start innovating, not just the technological foundations of our society, but its ethical premises as well.”

Dominguez said he is confident that the new administration “will get to some approximation” of its vision to significantly bring down poverty by 2022 through “massive investments in infra, education, and public health.”

“It will have been boosted by gains in honest government and a perceptible decline in corruption. It will be consolidated by proper dispersal of economic activity and improvements in our logistics system,” he said.

Dominguez said by the last 100 days of the Duterte administration, he imagines a Philippines leading the region in sustainable growth.

“That growth will happen in a climate of peace and order,” he said. “It will happen in the context of superior business confidence in our institutions of governance, a high degree of transparency, and a committed bureaucracy.”




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