The Department of Finance (DOF) will conduct a forum next month to heighten public awareness of, and support for, the Duterte administration’s proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) that aims to benefit 99 percent of Filipino taxpayers and help sustain the government’s accelerated spending on infrastructure, education, health and social protection programs.
Some 300 participants are expected to attend the event, titled “1 with the 99: A Forum on Tax Reform,” that will be held at the EDSA Shangri-la Hotel on July 5 starting at 9 AM.
Finance Secretary Carlos Dominguez III is expected to deliver the opening remarks at the forum.
The event dubbed “1 with the 99” alludes to the TRAIN’s intended beneficiaries—99 percent of taxpayers, including the working and middle class such as teachers, clerks, call center agents, police officers, soldiers and medical personnel—and the top 1 percent comprising the richest households who will help invest in the country’s future by paying higher taxes.
“We would like our fellow Filipinos to know more about how this priority program of President Duterte would benefit them. We will tell them that this tax reform package is truly pro-Filipino and pro-poor that will help fund the Duterte administration’s 10-point socio-economic agenda for high–and inclusive–growth,” Finance Undersecretary Karl Kendrick Chua said.
“This is an investment of each one of us in our country’s stable and vibrant future,” he said.
According to Chua, the forum will be followed by a sustained campaign bia social media and on the streets through billboards and banners “to further generate appreciation of, and support for, the tax reform program.”
The DOF, represented by Chua and Assistant Secretary and spokesperson Paola Alvarez, will explain at the forum how the TRAIN is expected to help fund the “DuterteNomics” strategy of enabling the government to sustain the Philippines’ growth momentum, support the golden age of infrastructure, attract investments and create jobs, achieve economic inclusion and transform the Philippines into a high middle-income country by 2022, by which time poverty incidence will have been reduced to 14 percent.
If “DuterteNomics” is sustained over the medium term, the government envisions the Philippines to be a high-income economy in one generation or by 2040.
Officials from the Departments of Health (DOH), of Education (DepEd), of Public Works and Highways (DPWH), Department of Transportation (DOTr), of Budget and Management (DBM), and the National Economic and Development Authority (NEDA) will also be on hand to explain how tax reform will benefit Filipinos in terms of closing the country’s infrastructure gap, enhancing their economic productivity, creating jobs and dramatically improving the efficient delivery of basic services such as education, health, housing and social protection for the poor.
DOF Assistant Secretary Mark Dennis Joven will explain the measures being implemented by the Bureaus of Internal Revenue (BIR) and of Customs (BOC) to improve tax collection and administration and curb official corruption.
The proposed TRAIN or House Bill No 5636 was approved on third and final reading by a 246-9 vote with one abstention last May 31 by the House of Representatives before the Congress went on sine die adjournment.
HB 5636 is a consolidation of the original tax reform bill—HB 4774—filed by Quirino Rep. Dakila Carlo Cua, and 54 other tax-related measures. TRAIN is the first package of President Duterte’s proposed Comprehensive Tax Reform Program (CTRP).
HB 5636 was passed after President Duterte had certified the bill as urgent, given that it was designed to help provide a steady revenue stream to his government’s ambitious high—and inclusive—growth agenda anchored on record spending on infrastructure, human capital and social protection for the poor and other vulnerable sectors.
The bill aims to slash personal income tax rates, lower donor’s and estate taxes, and, at the same time, adjust the excise taxes on fuel and automobiles, broaden the value-added tax base and implement a tax on sugar-sweetened beverages among other measures.
An increasing number of international financial institutions have lauded HB 5636’s approval as a positive step to reforming the country’s tax system and boosting revenue, and a testament to the Duterte administration’s decisive leadership and firm resolve to pursue broad economic reforms and ensure the financial viability of its ambitious public investment program.
Moody’s Investors Service said in a credit outlook that the House approval of HB 5636 will boost the Philippines’ credit rating because it will provide government with a fresh revenue stream and showed it can put reforms in place despite political controversies.
Fitch Ratings said the speed with “which the bill passed through the House—and President Duterte’s intervention to give it a push over the line—suggests that tax reform is a priority for government.” The tax reform package approved by the House, it added, will “widen the tax base and boost revenue.”
Deutsche Bank said that, “Beyond its fundamental economic benefits, [the tax reform bill’s] passage would send investors a strong signal that the administration has the political will to pass unpopular laws to institute long-term structural economic reforms.”
Nomura said, “The timeliness of the vote and the decisive result again underscore the strong priority that Duterte places on the economic reform agenda and his strong control over Congress.”
In a sign of positive business sentiment for this tax reform package, the Philippine Stock Exchange index (PSEi) went up by 90.37 points or 1.15 percent to close at 7,927.49 last June 1, or the day after the House had approved HB 5636 on third and final reading.
On June 5, the PSE closed at its highest level for this year at 8,001.38 points, and PSE president Ramon Monzon was quoted in media reports as saying that this breach of the 8,000 level was driven by “optimism over the developments in the DOF’s CTRP.”