The leadership of the House of Representatives is looking for more tax administrative measures to recover the foregone revenue from the proposed lowering of personal income-tax (PIT) rates.
In an interview, House Committee on Ways and Means and PDP-Laban Rep. Dakila Carlo Cua of Quirino said these tax administrative measures seek to raise the tax collections of the government.
“We’re looking for fuel-marking system [as tax administrative measure] against smuggling of petroleum,” Cua said.
With the new fuel-marking scheme, the Bureau of Customs has said it can easily determine if oil imports are smuggled.
Moreover, Cua said the government should also require all online businesses in the country to issue electronic receipts.
“We’re eyeing an electronic receipts for all online transactions to raise government revenue,” Cua said.
According to Cua, he will file these tax administrative measures separately.
“These could be included in the tax-reform package, but since it’s not easy to approve all of these in one package and since these are efficiency measures, I am planning to file these two as separate bills,” he added.
This, after Speaker Pantaleon D. Alvarez told the Ways and Means Committee to look for more administrative measures before considering the imposition of excise tax on petroleum products as one of the offsetting measures in the tax package.
“[Revenue-generating agencies should] plug holes in [their] revenue-collection efforts before Congress considers a proposal to impose new taxes on petroleum products,” Alvarez said.
Meanwhile, Cua said the DOF is set to present its revised tax-reform package before the Ways and Means Committee on Wednesday.
“I understand the position of Speaker Alvarez, because that’s the clamor of the people and he is sensitive to what the people are saying. I think, it is incumbent upon the committee to study the proposal,” he said.
Earlier, like the finance agency’s first proposal, Cua said only workers with a monthly salary of P20,833, or P250,000 annually, will be exempted from PIT under the new DOF proposal.
This runs counter to the proposal of President Duterte and other lawmakers, who want the DOF to exempt workers earning P25,000 monthly, or P300,000 annually, and below from PIT.
In the current setup, those earning P10,000 or less per month pay a 5-percent income tax, while those with yearly earnings of P500,000 and above pay a 32-percent income tax.
Also, the lawmaker said the DOF also maintained its proposal removing the value-added tax (VAT) exemptions for senior citizens and persons with disabilities.
The imposition of excise tax on petroleum, removal of VAT exemptions for senior citizens and PWDs and ad valorem tax on automobiles are among the offsetting measures being pushed by the Department of Finance in their first proposed Comprehensive Tax Reform Package, but opposed by lawmakers.
The Comprehensive Tax Reform Package seeks to lower personal income-tax rates and impose additional taxes on certain commodities.
The tax-reform package involves foregone revenue of around P200 billion but, at the same time, will generate around P566 billion for the government due to these new additional taxes.
According to Cua, the lower chamber will pass the tax-reform measure by June to help the government to finance the 2018 national budget.