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Monday, September 27, 2021

Higher VAT, of course

FORMER finance secretary Ramon del Rosario, Jr. has expressed support for the incoming administration’s initial pronouncements of increasing the value-added tax (VAT).

The official, now chief executive officer of conglomerate Phinma Corp that acquired the Aznars’ Southwestern University, served as the finance secretary under the Ramos administration from 1992 to 1993. He said, however, that while there are plans to increase VAT, the Duterte administration should also consider lowering income taxes for both individuals and corporations.

Budget Secretary-designate Benjamin Diokno recently said he is in favor of increasing the VAT up to a maximum of 15 percent in order to fund the annual budgetary requirements of the next administration.

“Conceptually, I’m in favor of the idea of increasing VAT from 12 to 15 percent, and reducing income tax rate both for individual and for corporations down to a level of 25 percent,” del Rosario said. He visited Cebu last week to launch the new logo of the Southwestern University Phinma, his company’s latest school acquisition.

Del Rosario also commended the incoming administration’s 10-point economic agenda, describing it as a “very positive” pronouncement. Among the well-received points is the acceleration of government spending so that it would constitute five percent of the country’s gross domestic product (GDP), as well as a plan to amend Constitutional restrictions on foreign ownership, except on land.

The former DOF secretary, however, expressed uncertainties over federalism, which President-elect Rodrigo Duterte has been advocating even before he announced his bid for the presidency.

“Federalism? That, I have not concluded in my mind, whether I’m in favor or not. My concern is I think we need a strong central government. Federalism may result in feudalistic practices where there will be feudal lords,” del Rosario said.

Generally, on the economic side, the finance chief said the Duterte administration enjoys confidence from the private sector based on the initial pronouncements and the appointments of Carlos Dominguez III to the Department of Finance and Ernesto Pernia to the National Economic and Development Authority (Neda).

The president-elect is scheduled to meet with the business community today (June 20) and tomorrow (June 21) in SM Lanang in Davao City. The consultative workshop dubbed “Sulong: Hakbang Tungo sa Kaunlaran” was organized by the Philippine Chamber of Commerce and Industry and the Mindanao Business Council.

The meeting will be participated by some 300 business owners. Local chambers all over the country were also invited.

Cebu Chamber of Commerce and Industry President Melanie Ng confirmed that she will be attending the event.
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