DOF exec hopeful for Package 1-b approval this year

Finance Undersecretary Karl Chua (Photo: PCOO)

MANILA — A ranking Department of Finance (DOF) official remains optimistic that Package 1-b of the proposed tax reform program will still get the approval of lawmakers this year.

Package 1-B tackles reforms that were not included in the approved version of the first package, namely the motor vehicle users’ tax, tax amnesty, and bank secrecy.

DOF Undersecretary Karl Chua said the motor vehicle user charge, which has three components namely increase in the rate, road board and road fund reform, is now being discussed by a Technical Working Group (TWG) in the House of Representatives.

In the Senate, a bill on the reforms on the road fund and road board has been filed by Senator Manny Pacquiao, he said.

Thus, Finance officials are requesting Senate President Aquilino “Koko” Pimentel III to file a bill proposing for an increase in road users’ tax rate to align the Senate discussions with that of the House of Representatives, he said.

The other components of Package 1-b are now being discussed at the committee level in both Houses of Congress, he said.

Finance officials earlier projected that Package 1-b might be approved before lawmakers take their recess from March 24 to May 13, 2018 but since this did not happen, Chua said they are hoping the bill would be approved at the Committee level during the resumption of session by mid-May and before lawmakers take another break before June 1.

“Hopefully in the next session before June 1 they can file (the committee-approved bill in the plenary),” he said.

Revenues from Package 1 of the Tax Reform for Acceleration and Inclusion law was earlier projected to bring in additional PHP130 billion revenues but the approved version will only bring in PHP90 billion.

Chua said the government’s budget is being reviewed by the inter-agency Development Budget Coordination Committee twice a year, or quarterly if needed.

He said it is still early to assess the government’s fiscal position right now but need to do it by June to check if Package 1-b has the chance to be approved middle of this year.

“If (it is) still feasible then we can still collect. But if it’s not feasible, meaning it’s not most likely to be passed, then we have to roll the revenues to the following year,” he said. “But this time I don’t see the need to change the (fiscal) numbers because it’s still too early,” he added.