By Joann Santiago
MANILA, Oct. 13 (PNA) — The Aquino government continues to favor a holistic tax reform, a Palace official said Tuesday.
Presidential Communications Operations Office (PCOO) Secretary Herminio Coloma Jr., in a briefing said, a holistic tax reform along with accelerated infrastructure development were needed to ensure the continued high growth trajectory of the economy.
He explained that these measures “will enable the Philippines to join the ranks of high-income countries.”
“The government believes that instead of piecemeal changes in the tax rates, a holistic tax reform program is needed to ensure the continued implementation of essential programs on social protection, poverty alleviation, employment generation, educational competitiveness, housing, universal health care, as well as for public infrastructure and national defense and security,” he said.
There are pending bills in Congress calling for lower personal tax among others.
To counter the possible negative impact of these bills on national government’s revenues, the Department of Finance (DOF) proposed for an increase in the value added tax (VAT) from 12 percent to 14 percent.
Both proposals, however, remain unattractive to the President, who earlier in his term vowed against imposing new taxes.
The only tax increase bill he signed into law is the amendment of the Sin Tax Law, which hiked taxes on tobacco and alcohol products since these were previously based on 1996 prices.
Coloma stressed that “sound management of macro-economic fundamentals anchored upon good governance has been the key to the attainment by the Philippines of relatively high GDP (gross domestic product) growth rates for the past five years.”
The Philippine economy registered a big leap in domestic growth in recent years with average rate placed at above five percent from around three percent in the past years.
It has proven its resiliency from negative external developments, thus, the achievement of investment grade ratings in 2013.
With these developments, the Aquino government wants to secure a solid growth path for the domestic economy by putting in reforms that would boost the country’s long-term growth. (PNA)