Philippines’ Department of Finance (DOF) has proposed a comprehensive tax reform program (CTRP) as part of the government’s pursuit in raising revenues. The CTRP package is a kind of reform that targets to establish a more progressive tax system that is presumably efficient in economic terms. This would not exempt a lower tax rates though but mainly a restructuring of oil prices specifically diesel and implementing specific tax on “sin” products such as cigarettes and alcohol.
However, this proposal is backed up by the Banko Sentral ng Pilipinas (BSP), reckoning that it will have a very positive effect in our economic growth. BSP Deputy Governor Diwa Guinigundo supports the CTRP saying “that the enactment would contribute an additional 0.6 percentage point to the country’s GDP growth in 2017, and 0.2 percentage point in 2018.”
“Lowering the income tax and corporate tax will translate immediately to higher consumption and, in the part of the government, infrastructure, human development and social protection for the less fortunate. That’s the impact, immediate consumption and investment,” Guinigundo said on the sidelines of the hearing.
He added that this procedural will pave the way for more business establishments to move forward with new projects and investment opportunities particularly in the sector of goods production and infrastructure. “Guinigundo said the BSP estimates inflation rate to go up by 0.5 to 0.7 percentage point in the next two years with the implementation of DOF’s proposed tax reforms.”
