THE Finance department wants to first see the results of the ongoing estate tax amnesty, which will end on May 31 next year, before Congress passes a measure extending it by another two years.
“In general, what we would have preferred for the amnesty law… is to play it out first. Rather than having the deadline… still next year and then you already extend it,” Finance Undersecretary Antonette C. Tionko told senators on Wednesday.
“I think the timing is more the issue. It’s just prolonging it, but we would have collected it already.”
Ms. Tionko was speaking before the Senate Finance Committee, led by Senator Juan Edgardo M. Angara, which was tackling the Department of Finance’s (DoF) proposed P16.01 billion for 2021.
Mr. Angara asked the DoF if it supported the measure extending the estate tax amnesty up to 2023 from its current 2021 deadline, which was already passed on third reading by the House of Representatives. No counterpart measure has so far been filed in the Senate.
Finance Undersecretary and Chief Economist Gil S. Beltran said in a phone message the department will “check first what is the outcome so far before any decision to extend.”
NEW SOURCES OF REVENUES
In the same hearing, Finance Secretary Carlos G. Dominguez III said the department will begin drafting proposals for additional revenue sources around 2021-2022.
“I think some time late 2021, early 2022, we will start looking at additional revenues to pay for the heavy indebtedness that we are incurring this year,” Mr. Dominguez said during the hearing.
Mr. Dominguez said, as of Sept. 20, the government has secured $9.9-billion financing through loans and grants from development partners and markets to fund its coronavirus response.
“In the next few months, we will be concentrating on improving tax administration and passing the remaining tax packages,” he told reporters over a phone message.
This includes the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill, which will immediately cut the corporate income tax to 25% from the current 30%. This will further be reduced by one percentage point annually beginning 2023 until 2027.
The measure, which forms part of the government’s economic stimulus package, will generate P40-billion foregone revenues in 2020 and P650 billion in the next five years.
“The proposal to reduce the tax is really a part of our stimulus program to stimulate the economy. And really, this is trusting the private sector to make the right decisions with that money, to retain employees, re-invest in their companies,” Mr. Dominguez said in the hearing.
“We believe the economy will be stimulated and the additional investments will generate more taxes in the long run, and make us more attractive to foreign investments.” — Charmaine A. Tadalan