January 10th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) assured the Department of Finance (DOF) that the House of Representatives, and the tax panel in particular, is “always ready and always committed to the President’s socioeconomic reform agenda,” citing that the panel itself “even initiated its own reforms, such as digital taxation, e-sabong taxation, and the POGO tax law, all of which the DOF fully supports.”
Salceda made the statement in response to a recent release by the DOF appealing to Congress to pass the remaining packages of the Comprehensive Tax Reform Program, President Duterte’s landmark fiscal legislative agenda, and which was principally authored by Salceda.
In a recent statement, Finance Secretary Carlos Dominguez said that the Department is “optimistic” about the chances of Congress approving the remaining tax reform packages.
“The House is ready for bicam. Whenever the Senate sends it, we will act on it,” Salceda assured.
“I’m a true believer in many of the features of these reforms, which I have advocated for since the 1990s.”
Salceda also said that he has ‘some proposals to make the packages more responsive to the economic situation.’
“On Package 3 [Real Property Valuation and Assessment Reform], I suggest amending the rules so that we no longer tax fixed machinery and equipment that is in active use for business. That will encourage modern and productive use of land,” Salceda said.
Salceda also said that “a transition period may be necessary to ease in LGUs, so that the changes in valuation are not so drastic that small farmers, residential owners, and small businesses are not shocked by their tax increases.”
“I think a five-year transition period is a good starting point for discussions. For high-value areas such as business districts and exclusive for-the-rich villages, we can immediately implement the accurate valuations. Finally, I also want a bigger discount for socialized housing, through lower assessment levels,” Salceda said.
Changes to tax reform for banks and financial intermediaries
Salceda also said that he sees certain changes that could be made to Package 4 of the CTRP, on passive income and financial intermediaries, to make the proposal ‘more appealing to a broader consensus.’
“I propose three major changes to PIFITA [Passive Income and Financial Intermediaries Taxation Act]. First, I would like to reconsider the taxes we impose on basic records such as birth certificates. Second, let us take a second look at the DST taxation of the PCSO, to see whether we are taking away from their revenues to serve the medical needs of the poor. Finally, I would like to take a look at how we tax trading gains on cryptocurrencies and other non-security assets. These in principle should at the very least be subject to capital gains taxes,” Salceda added.
“The aim should still be revenue neutrality for Package 4, and the non-tax priorities of Package 3. With Package 3, we can complete infrastructure faster, since confusing or disharmonized valuation tends to be part of the right-of-way issues,” Salceda explained.
“I think the Secretary of Finance knows that the House will not cause any delay in the passage of key reforms. We sill have time. I urge my Senate counterparts to see what we can still finish among the reforms,” Salceda said. (end)