Philippines Aims to Conclude Tax Reform Hearings by Year-End

The Department of Finance (DoF) said it hopes to receive the Committee Report for its next tax reform package, known as Promoting Growth, Revenue, and Equity towards Socio-economic Sustainability (ProGRESS) bill, by December. “Our target is to finish the hearings in Congress by November or December,” Undersecretary Karlo Fermin S. Adriano told reporters on Tuesday. “So far we are still at the hearings. We don’t have the committee report yet.” Parts of the package being deliberated involve a general tax amnesty, other excise taxes, as well as the global minimum tax, he said, noting that a final consolidated version will ultimately be decided by the Committee of Ways and Means. “In Congress, there are so many bills… Because each of them has different authors. So, that’s very normal to have multiple versions. But at the end of the day, they will get harmonized at some point,” Finance Secretary Frederick D. Go told reporters on Tuesday. He added that the bill has a sponsor in the House. When asked about the potential inflationary impact of the bill, Mr. Adriano said the aim is to lower consumption of so-called “sin” products like tobacco and alcohol. “That’s really the intent, to make the sin products less affordable. We want people to lower their consumption. Because (these products will make people) sick. There are negative externalities related to the consumption of these products,” he said. The ProGRESS bill is a comprehensive tax reform package that, apart from new tax breaks, “sin” and excise taxes, as well as a possible wealth tax. The DoF is pushing for new or higher taxes on sweetened beverages, e-cigarettes, flexible plastic products, luxury vehicles, and private aircraft. The package is projected to generate average revenue of P129.68 billion annually between 2027 and 2030. — Aaron Michael C. Sy