The Asian Development Bank (ADB) sees the progressive tax measures being proposed by the Department of Finance (DOF), including reforms in the excise taxes of automobiles and petroleum products, will help sustain the country’s economic growth.
ADB President Takehiko Nakao, in a recent meeting with Finance Secretary Carlos G. Dominguez III, said he is optimistic that the DOF’s proposed tax-reform program will improve the business environment and help sustain the growth of the Philippine economy.
The DOF earlier said broadening the value-added tax (VAT) base and increasing oil excise taxes will partly offset revenue losses from the reduction in personal income-tax (PIT) rates.
“If successfully implemented, the Duterte administration’s development agenda to step up spending on infrastructure, implement tax reforms and cut red tape will sustain high growth rates and increase job creation,” said Richard Bolt, ADB country director for the Philippines.
Bolt earlier projected the country’s GDP growth at 6.2 percent for 2017.
The first package of the DOF-proposed Comprehensive Tax Reform Program is contained in House Bill 4774, which seeks to reduce PIT rates, plus a corresponding set of revenue-compensating measures, which include lowering the rates for estate and donor’s taxes, expanding the VAT base but retaining exemptions for senior citizens and persons with disabilities, and adjusting automobile and fuel excise taxes.
Meanwhile, Nakao expressed to Dominguez his deepest condolences to the victims of the recent earthquake in Surigao, reiterating the bank’s offer of assistance in mobilizing resources to help the affected communities.
The ADB is also looking forward to the Philippines’s hosting of its 51st annual meeting of the Board of Governors, which will be held in Manila from May 3 to 6, 2018, according to Nakao.
The ADB head updated Dominguez on the preparations for the Bank’s 50th annual meeting, which will be held from May 4 to 7 this year in Yokohama, Japan.