30 Aug 2021
The Philippines Department of Finance is calling on lawmakers to pass the Duterte administration’s remaining tax measures to prepare the economy for additional spending to bolster the pandemic recovery.
Finance Undersecretary and chief economist Gil Beltran announced Congress should authorise the final fiscal reforms to help the Philippines survive the coronavirus crisis.
“The country should continue to adopt fiscal reforms, particularly the tax reforms still pending in Congress, to sustain these fiscal gains,” Beltran stated.
There are two packages remaining within the Comprehensive Tax Reform Program (CTRP) which are yet to be passed by Congress. These are the Passive Income and Financial Intermediary Taxation Act, also known as PIFITA, as well as the provisions of the real property valuation reform.
The real property valuation reform, the third package in the CTRP, aims to implement real property valuation standards observed by the international community. It will also establish a single base for real estate taxation using updated values as a yardstick to improve collection.
Furthermore, the package aims to protect real property valuation from political issues, yet the authority remains to establish, modify and regulate tax rates with local governments.
In regard to PIFITA, this will streamline and minimise the number of tax rates for passive income, financial services and transactions to 36 from 80. The measure also aims to set a unified rate of 15% tax on capital gains, interest income and dividends.
Beltran added that the government hiked its expenditures during the Covid crisis via fiscal reforms, with tax collections improving in the first half of the year.
The government intends to increase revenues by over 11% between 2021 and 2024 to P3.99 trillion, aiming to reduce the fiscal deficit to 4.9% in 2024, from the forecast 9.3% this year.