A global bank has raised concern about the delayed passage of the Finance department’s tax reform program, saying that holding the much-needed tax reforms hostage in Congress would negate the government’s ambitious infrastructure spending plans for the next six years.
ANZ Research economist Eugenia Fabon Victorino said stalling the approval of the first tranche of tax adjustments would leave the Duterte administration’s pipeline of infrastructure projects unfunded, and would also keep agencies from preparing to adopt new tax collection methods.
The Department of Finance (DoF) has already submitted the first package of its proposed tax reform plan to the House of Representatives, which involves adjusting the income tax brackets for individual earners. The revenue hole will be plugged by the removal of some exemptions to value-added tax (VAT), coupled with higher duties on cars and fuel, as captured by House Bill (HB) 4774.
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