Finance Secretary Carlos Dominguez III underscored the importance of public diplomacy to win popular support for the Duterte administration’s proposed Comprehensive Tax Reform Program (CTRP) by convincing Filipinos that an overhaul of the outdated tax is the “key link” to “redeeming the country’s future.”
“It is important for us to quickly conduct public diplomacy to win our citizens to the side of reform. We should be able to convince our people of the long-term benefits of renovating the architecture of our country’s revenue system,” Dominguez said. “We need to convince our people the comprehensive tax reform package is the key link to a more inclusive economy further down the road.
“This can be done only with the passage of the comprehensive tax reform program. This is the key link to redeeming our nation’s future,” said Dominguez in his remarks during Friday’s tax reform road show jointly conducted by the Philippine Chamber of Commerce and Industry (PCCI) and the United States Agency for International Development (USAID) at the Shangri-La Hotel in Makati City.
PCCI-USAID tax reform road shows have been held in the provinces of Pampanga, Palawan, Cebu, Bohol, Davao, and Cagayan De Oro to inform the public of the benefits of the CTRP and gather their inputs on how to further fine-tune the proposed tax reform plan.
Dominguez noted that previous secretaries and undersecretaries of the DOF have vigorously endorsed this tax reform package, along with multilateral institutions such as the World Bank, the International Monetary Fund, and the Asian Development Bank.
The Philippines’ development partners, as well as several reform-oriented civil society groups have also expressed their support for the CTRP.
Although the CTRP has secured the support of an increasing number of institutions and organizations, Dominguez said, “It is the man-on-the-street we now need to win over. This man-on-the-street is susceptible to populist and free-rider arguments put forward by groups that oppose any and all reforms in taxation.”
Dominguez said the popular proposals in the CTRP’s first package, such as the significant cuts in personal income tax (PIT) rates and estate taxes are “fairly easy to sell” to the public, but they should also be educated on the underlying reasons behind these reforms, which are to align tax rates with the rest of the region to make the Philippines a magnet for investments and to increase the purchasing power of compensation earners to further boost economic productivity.
The CTRP’s first package, introduced in the Congress by Rep. Dakila Carlo Cua as House Bill No. 4774, also aims to lower donor taxes and provide revenue reform measures such as adjusting the excise taxes on automobiles and fuel and broadening the Value Added Tax (VAT) base but retaining exemptions for seniors and persons with disabilities.