Pass the CTRP

Nelson C. Bagaforo

THE Duterte administration has something to rejoice. Congress appeared to approve in full, when both Chambers resume session in May, the Comprehensive Tax Reform Package (CTRP) proposed by the Department of Finance (DOF).

This if we have to believe Finance Secretary Carlos Domiguez III who recently announced the House committee on ways and means to "approve in principle" CTRP's first phase.

This allays fears that amid opposition, Congress may only approve the tax reform measure's popular provisions, including the lowering of the personal income tax rates, without the corresponding measures to raise funds for the implementation of President Rodrigo Duterte's ambitious public investment program. These proposed measures aim to offset the revenue erosion arising from the reduced income tax collection.

If both Chambers, the House of Representatives and the Senate, approve this tax reform package in its entirety, the government can raise an additional P718 billion for education, P139 billion for health, P267 billion for social protection, welfare, and employment, and P1.73 trillion for urban and rural infrastructure.

These can be raised from revenue enhancing measures, including, among others, move to reform the excise tax system for fuel and automobiles and broaden the value added tax base. The tax reform proposal is provided for in House Bill 4774, authored by Quirino Representative Dakila Carlo Cua, who also chairs the House committee on ways and means

The funds that can be raised from these proposed measures are enough to achieve inclusive growth and the government's growth target to expand the economy to 7 percent this year from 6.8 percent in 2016.

Dominguez said the decision of the committee to pass tax reforms as a package rather than on a piecemeal basis is a step closer for the Congress to help the Duterte administration fund its ambitious agenda to sustain the high-growth momentum, dramatically cut poverty and transform the country into a high middle-income economy by 2022.

"Congressional action on the first phase of the DOF-proposed CTRP would help create a strong buffer that will insulate the country from the surge of protectionism now sweeping across the globe, and thereby keep the economy on its targeted annual expansion of seven percent or better," Dominguez said.

He went on to say that if we fail to pass the revenue-enhancement measures, we will lose the growth momentum and we will face the "specter of large budget deficits and move closer to a debt crisis."

"Growth would not only be slower but exclusive, with the rich continuing to corner the wealth created and the poor kept out of the national economic mainstream," Dominguez warned.

So there is no reason for congressmen and senators to dismiss this proposal. It is their duty to protect the Filipino people who put them in power, anyway. Let's just wait what will happen to CTRP.