MANILA—A ranking Bangko Sentral ng Pilipinas (BSP) official said the Finance department’s tax reform proposal will help ensure price stability in the country.
“As you know, we have expressed support of such a plan because from a monetary perspective, over the medium term, that is going to be a positive for price stability,” BSP Deputy Governor Diwa Guinigundo said.
Last March, the House of Representative’s Ways and Means Committee approved in principle the first package of the Department of Finance’s (DOF) Comprehensive Tax Reform Program (CTRP) and decided to form a Technical Working Group (TWG) to study it further.
Finance officials hope that lawmakers will give their thumbs up on the tax reform measure by the middle of this year.
Last week, Finance Secretary Carlos Dominguez III said he remained optimistic that the first package of the CTRP would be approved by July.
”Yes. We are very confident that shortly after June the legislature will pass the first package that we have related to personal income taxes and fuel taxes,” he said in an interview by Bloomberg News Friday at the sidelines of the 12th ASEAN finance and central bank governors meetings in Cebu.
Dominguez said the tax reform program was the key to the Duterte administration’s goal to ensure that funding would be available for the implementation of the government’s infrastructure program, which is targeted to address disparities in the country.
CTRP’s first package, which is being espoused by House Bill 4774, proposes the cut on personal income tax and hikes on fuel and vehicle excise taxes.
DOF officials expected an approval of measures before lawmakers paused for a break mid-March but this did not materialize.
Data from the Department of Budget and Management (DBM) show that for 2017 alone, about 23.1 percent of the national budget has been allocated to fund the construction of road networks as well as transportation and communications facilities.