THE House Committee on Ways and Means on Wednesday said it will try to approve all of President Marcos’s tax-related priorities “next week so that the House can send them to the Senate before we begin budget hearings.”
Albay Rep. Joey Sarte Salceda said his committee will tackle and try to approve a mining committee report next week.
“That’s the last item on our list of priorities from the Sona. Hopefully, by end of August, the House has approved all the fiscal-related Sona priorities, including the military and uniformed personnel pension reform,” Salceda said.
“Definitely, we will try to complete the reforms before the budget hearings begin,” Salceda added.
The tax measures Marcos requested from Congress are the tax on single-use plastics, the VAT on digital services, the mining fiscal regime, the motor vehicle user’s charge updating, and the Ease of Paying Taxes Act. Marcos also requested Congress to enact a reform of the military and uniformed personnel pension system to ensure its sustainability.
“The committee is done with MVRUT. All the others are approved on third reading, except mining, which will be taken up in the coming days,” Salceda added.
Salceda also says they expect the Ease of Paying Taxes to be approved by the Senate this August.
Salceda said these reforms “are crucial to ensuring that President Marcos has the fiscal space he needs to make his vision happen.”
A strong tax system, exemplified by tax effort or tax-to-GDP, is the foundation of a strong state capable of delivering public goods and services, he said.
“So, we want to enact all these tax reforms, because while revenue has been growing, the economy is growing much faster, so we are seeing warning signs of declining tax effort. Currently, as of the first semester, we are looking at tax effort of 12.8 percent. Last year it was 14.6 percent. So, we need to catch up,” he said.
“It’s possibly a sign that the economy is moving towards things we are currently not taxing or are under taxing. Definitely, car sales are up 28.1 percent—and we have not updated MVUC rates there since 2004, not to mention our excise tax exemptions on pick-up trucks,” he added.
Salceda said that e-commerce is also expected to grow by as much as 22.9 percent this year, and a lot of those sales are escaping taxes due to de minimis rules in customs and “that we aren’t fully making ecommerce sites withholding agents for VAT yet.”
“That’s why you need to keep evolving your tax system as the economy changes or evolves. Otherwise, it outpaces you, and you don’t capture the revenues you need to support economic growth,” Salceda added.
“Definitely, PBBM needs the fiscal space. That means new tax items. We can’t rely on tax administration alone. No amount of tax administration improvements will capture taxes on new and emerging sectors not contemplated by the Tax Code,” Salceda added.
Salceda targets early approval of tax bills
Source: News Paper Radio
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