A COMPREHENSIVE tax reform in the country, as proposed by the incoming administration, will pave way for a more robust economy, a top businessman said.
Mindanao Business Council chair Vicente Lao told reporters on the last day of the two-day consultative workshop with business community at the SMX Convention Center Tuesday, that this will be good for business and will help make life a little better for the middle income class.
“The Duterte administration wants to make life a little better for the middle income class, so by reducing those taxes there is a big portion of that that affects the middle income class like income tax,” he said.
Incoming Department of Finance (DOF) secretary, Carlos Dominguez announced before over 450 business leaders on Tuesday that the possible tax reforms are all-in 1 million income tax exemption, lowering of personal income tax and corporate tax rates to be competitive with the region, rationalizing fiscal incentives, expanding the Value Added Tax (VAT) base and indexing oil excise taxes to inflation.
“The corporate tax will definitely affect the corporations but by that you will put more money into the pocket of the middle income class, with that they will have more money to spend, more disposable income,” he said.
“It will be good for business, the economy will move more,” Lao stressed.
But Lao was quick to add that the immediate effect of this action will be creating a negative effect on government income.
“Makukunanang income ng government but that will have residual effect, upon implementation will have an alternative way of sourcing income,” Lao said.
The incoming administration’s economic team said that the tax rates may be pegged with Hong Kong and Singapore or even down to the Asean neighbors and make a little lower to attract investors.
Tax reform was the top actionable recommendation made by the business community during the two-day economic conference. Apart from tax reform, business community’s recommendations also include National ID System, Ease of Doing Business, Improvement Of Internet and Telecom Services, Value-added chain and Responsible Mining, Development of Regional Industries, Review Of Conditional Cash Transfer Program and Reduction of Public-Private Partnership (PPP) Bottlenecks and Respect for Contracts.
The 10-point socioeconomic agenda laid by the Duterte administration are focused on continuation of Macroeconomic policies, tax reform, ease of doing business, infrastructure spending, rural development, land administration, human capital development, science, technology, arts, social protection program and reproductive health. (ASP)