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Senate panel reviewing Duterte DOF's proposed new taxes, hikes

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Wena Cos, ABS-CBN News

<p>MANILA - The Senate&#x27;s tax panel is reviewing measures earlier proposed by the administration of former President Rodrigo Duterte to pay the country&#x27;s debts and sustain growth. </p><p>The Senate Ways and Means Committee is looking at the Fiscal Consolidation and Resource Mobilization Plan proposed by the Department of Finance under then-Finance Secretary Carlos Dominguez, according to the Senate Tax Study-Research Office (STSRO).</p><p>The Duterte DOF’s plan, which was supposed to be implemented from 2023 to 2025, included the following:</p><ul>	<li>Deferment of TRAIN income tax reduction</li>	<li>Hiking fuel excise taxes</li>	<li>VAT expansion</li>	<li>Tax on motorcycles, pickup trucks</li>	<li>Higher taxes on alcohol and cigarettes</li>	<li>Rationalizing taxes mining</li>	<li>Reforms on Real Property Taxes</li>	<li>Taxes on</li>	<li>Digital service </li>	<li>Crypto</li>	<li>Single-use plastics</li>	<li>Casino admissions</li>	<li>Carbon emissions</li></ul><p>The DOF proposed to defer reductions to personal income taxes under the Tax Reform for Acceleration and Inclusion (TRAIN). </p><p>Under the TRAIN Law, income taxes are supposed to be lowered effective January 1, 2023, but the DOF proposed deferring this to 2025.</p><p>&quot;If you have a taxable income of 2 million pesos, for this year you’re paying 130k pesos as income tax. For next year, it is intended that you would only be paying 102,500 pesos, but the DOF would want to defer that development,&quot; said Atty. Harold Bartolome, STSRO Assistant Service Chief of Indirect Taxes.</p><div><strong>FUEL EXCISE TAX HIKE, CRYPTO</strong></div><p>Despite the clamor for freezing fuel excise taxes, the DOF also looked at increasing excise taxes on petroleum products by P1.00 per liter for a minimum of 3 years, and imposing taxes on local coal, repealing Presidential Decree 972 or The Coal Development Act of 1976. </p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/07/20/22/freeze-on-fuel-excise-taxes-unlikely-senate-office">Suspension of fuel excise taxes &#x27;far fetched&#x27; says Senate tax research office</a></li></ul><p>The DOF also planned to impose taxes on cryptocurrencies, but the STSRO admitted further studies are required to explore this possibility. </p><div><strong>VAT EXPANSION</strong></div><p>The DOF also proposed the expansion of the Value Added Tax base which will remove exemptions except for those in the education, agriculture, health, and raw foods sectors. </p><p>It also sought to reimpose the 60-month amortization period of input VAT on capital goods, which was only allowed until December 1, 2021 under the TRAIN Law. </p><p>The DOF also proposed the imposition of VAT on digital service providers, seeing it as a &quot;new source of revenue,&quot; while anticipating the continued digitization of the economy. Filed as House Bill 7425 and Senate Resolution 410 under the 18th congress, Bartolome said he expects the proposal to be carried over to the 19th congress. </p><div><strong>TAX ON MOTORCYCLES, PICKUP TRUCKS</strong></div><p>Another carryover is the reform on motor vehicle users charge, which will impose a single and unitary rate based on gross vehicle rate of all motor vehicles, filed as House Bill 6136 in the previous Congress. </p><p>Connected to it is the repeal of the excise tax exemption of pick-ups and the imposition of taxes on motorcycles. </p><div><strong>TAX ON MINING, CASINO ADMISSIONS, PLASTICS</strong></div><p>House Bill 8400 and Senate Bill 1979 are also expected to be carried over by the new congress, which will open its first regular session on July 25. The proposals seek to establish a single and rationalized fiscal regime applicable to all mining agreements. </p><p>The DOF also proposed imposing mandatory charges on casino admissions with a flat rate of P3,500, a 5-percent tax on revenues from e-betting activities, taxing non-essential and semi-essential luxury goods, and single-use plastics at 20 pesos per kilogram upon removal from production facility or customs territory. </p><div><strong>REAL PROPERTY TAXES</strong></div><p>The DOF was aiming to implement by 2023 the Real Property Valuation and Assessment Reform Act, filed in the previous congress under Senate Bills 246, 519, and 894. </p><p>The measure seeks to adopt internationally accepted valuation standards, the establishment of a single valuation base for taxation through the adoption of a schedule of market values and the use of updated value benchmarks. </p><div><strong>ALCOHOL AND CIGARETTES</strong></div><p>For 2024, the DOF intended to implement a reform on health taxes to increase taxes on cigarettes, e-cigarettes, alcopops, and impose a unitary rate of P12 per liter volume on sweetened beverages. </p><div><strong>CARBON TAX</strong></div><p>By 2025, the DOF expected to impose taxes on carbon emissions, which is hoped to generate an additional P121.9 billion in annual revenues. </p><p>The STSRO said this proposal sees the additional tax passed on to consumers and must be reviewed accordingly. </p><p>As head of the Senate Ways and Means Committee, Senator Sherwin Gatchalian said he &quot;will put taxpayers first,&quot; insofar as paying taxes is concerned by further simplifying the tax regime. </p><p>&quot;[I want to make] sure that taxpaying is as easy as buying goods in Shopee, as easy as booking a flight or hotel. Our taxpayers get the gold standard treatment,&quot; he said. </p><p>He also said that he will focus on micro, small, and medium-sized enterprises (MSMEs), calling them the backbone of the economy.</p><p>The Philippines&#x27; sovereign debt ballooned in the last 2 years, as the Duterte administration spent heavily to combat the COVID-19 pandemic, while maintaining its ambitious infrastructure push. </p><p>Finance Secretary Benjamin Diokno however has downplayed concerns over the country’s rising debt saying the economy can “outgrow” it.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/06/02/22/ph-sovereign-debt-hits-p1276-trillion-in-april">Philippines&#x27; sovereign debt hits P12.76 trillion in April</a></li>	<li><a href="https://news.abs-cbn.com/video/business/05/28/22/diokno-says-ph-can-outgrow-p1268-trillion-debt">Diokno confident of PH&#x27;s ability to outgrow P12.68 trillion debt</a></li></ul><div> </div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=2054115" width="100%"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div><div><br/> </div>

The Senate's tax panel is reviewing measures earlier proposed by the administration of former President Rodrigo Duterte to pay the country's debts and sustain growth. 

Senate panel reviewing Duterte DOF's proposed new taxes, hikes

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Senate panel reviewing Duterte DOF's proposed new taxes, hikes

Wena Cos,

ABS-CBN News

Published Jul 20, 2022 07:22 PM PHT

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Updated Jul 20, 2022 08:13 PM PHT

Read More:

new taxes

fuel excise taxes

income tax

tax reform

19th congress

department of finance

senate ways and means committee

TRAIN

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