FINANCE Secretary Carlos Dominguez III called on lawmakers to approve the Duterte administration’s proposed reforms on corporate taxation and the modernization of investment incentives as he allayed apprehensions over the impact on prices of the first tax reform package, which contributed less than a half-percentage point to last month’s inflation rate.
Dominguez said the first package—the Tax Reform for Acceleration and Inclusion (TRAIN) Law—accounted for only four-tenths of a percent of April’s inflation rate of 4.5 percent, which means that for every peso increase in prices, only 9 centavos can be attributed to TRAIN.
“TRAIN has been unfairly blamed for the elevated inflation rate we are currently experiencing. By our estimates, fully two-thirds of last April’s 4.5 percent inflation rate is typical of a rapidly expanding economy. The remaining is due mainly to the sharp increases in key imported commodities specifically oil, the realignment of currency exchange rates and a robust increase in domestic demand,” said Dominguez during Tuesday’s first hearing called by the House Committee on ways and means to discuss House Bill No. 7458.
“At any rate, the inflationary impact of TRAIN is expected to diminish over the next few months,” Dominguez said.
Rep. Dakila Carlo Cua, the committee chairman, along with Deputy Speaker Raneo Abu and Deputy Majority Leader Aurelio Gonzales Jr., filed HB 7458 that aims to lower the corporate income tax (CIT) and reform the investment incentives system. This measure comprises Package 2 of the tax reform program.
Dominguez thanked the leadership and members of the House for passing the TRAIN. (PR)