THE House of Representatives yesterday approved on second reading three priority tax measures meant to raise at least P47 billion in revenues to help fund the programs of the Marcos administration.
Congressmen approved on final reading House Bills No. 4102 or the proposed single-use plastic bags tax law; 4122, or the value-added tax (VAT) on non-resident digital service providers; and 4339 or Package 4 of the Duterte administration’s comprehensive tax reform program.
Out of the expected revenues, some P12 billion will come from the non-resident DSP VAT; P5 billion from plastic bags, and P30 billion from Package 4, the bulk of which will come from removing the tax exemption on pick-up trucks and increasing the tax rates on foreign currency deposit units to 20 percent.
“With this, the House wraps up all the priority tax measures of the Duterte-era comprehensive tax reform program, and is ready to move on to tax collection reforms, as prioritized by the Marcos administration,” said Albay Rep. Joey Salceda, chair of the House committee on ways and means and the bills’ principal author.
Salceda said the three measures are expected to be approved on third and final reading by Monday or Tuesday next week.
He noted the expected total revenue is around two percent of the Bureau of Internal Revenue’s (BIR) collection target and 0.2 percent of the country’s gross domestic product GDP) “so (Finance) Secretary (Benjamin) Diokno only needs to look for 0.1 percent of GDP more in tax collection improvement.
“The Medium -Term Fiscal Framework, which we in Congress approved, takes into account 0.3 percent of GDP in tax collection efficient improvement every year,” he said.
Salceda stressed that the digital services VAT will not be imposed on Filipino businesses because its emphasis is on foreign or non-resident digital service providers like Netflix.
However, Filipino consumers will still be the one to pay once the tax measure becomes a law.
“All major Asean economies impose VAT on these entities. Tayo na lang ang hindi (save for us),” said Salceda, whose bill is being opposed by militant lawmakers who stressed that corporations should be taxed more instead of consumption-based services which will affect the masses.
Salceda said the plastic bags tax, which will impose an excise tax of P100 per kilo of disposable plastic bags, is in line with the country’s efforts to fight ocean pollution, especially “as we are now recognized ignominiously as the world’s biggest ocean plastic polluter.”
As for Package 4 of the CTRP, he said the lifting of the exemption on pickup trucks “merely corrects an unfair privilege on a vehicle that is mostly for the rich, occupies very large space on the road, and is by all accounts less fuel-efficient than most other vehicles.”
Salceda also expects that the measures will be ready for discussion in the Senate, which is also expected to tackle the Ease of Paying Taxes Act.
“I think we will have at least one tax law enacted over the next six months, very possibly EOPT. But I am hopeful that we will have at least one more, hopefully one of these three,” he said.
