THE PALACE on Thursday expressed optimism that the last two tax reform bills being pushed by President Rodrigo R. Duterte will passed before he steps down in 2022, saying the tax reform agenda has the support of Congress.
The proposed Real Property Valuation and Assessment Reform Act and the Passive Income and Financial Intermediary Taxation Act are the third and fourth packages of the tax reform program. The two measures are still pending at the Senate.
The last two components of the Comprehensive Tax Reform Program are likely to pass because they have been certified as urgent by the Executive branch, the President’s spokesman Herminio L. Roque, Jr. said at a televised news briefing.
“I think Congress… defers to bills which have been certified as urgent by the Executive and the reality is we also have support in both houses of Congress for these initiatives,” he said.
If passed, the real property valuation bill will establish a “single valuation base for taxation through the adoption of the schedule of market values of (local government units), and use the updated values as benchmarks for other purposes, such as right-of-way acquisition, lease, rental, etc.”
The measure is set to expand the property tax base of LGUs “without increasing the existing tax rates or devising new tax impositions.”
The House of Representatives passed its version of the bill on third reading in November 2019, while the Senate version is still pending at the committee level.
The proposed passive income law, which aims to simplify the tax structure for financial instruments, was approved by the House in September 2019 and at committee level in the Senate.
The first package — Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act, — was signed by Mr. Duterte in 2017 after it was submitted to Congress in 2016. The law that cuts personal income tax rates and hikes or imposes sales taxes on various items encountered resistance in the Congress, with some legislators calling it anti-poor.
In August 2018, a few months before the 2019 elections, Finance Secretary Carlos G. Dominguez III said the President’s remaining tax reforms, which included the second package at that time, would face rough sailing in Congress partly because of “the proximity of elections.” He said tax policy “is never the best way to be reelected.”
Maria Ela L. Atienza, a political science professor at the University of the Philippines, told BusinessWorld in January that key economic bills usually take a back seat at the Senate because the chamber is “of national” significance, and senators may be considering their chances in the next elections.
The next national elections are scheduled for May 2022. — Kyle Aristophere T. Atienza