Budget Chief wants two more tax reform packages passed by yearend

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(file photo)

Metro Manila (CNN Philippines, July 25) — Budget Secretary Benjamin Diokno is confident the next two tax reform packages will hurdle Congress by yearend on the back of support from administration allies.

The optimism comes even if tax reform has yet to be include in the Senate's legislative priorities.

"Well they are part of the administration right? Then it is their responsibility to respond to the demands of the President. The President is clear; he wants the tax reform packages passed before the end of the year," Diokno said in a media briefing Wednesday.

President Rodrigo Duterte said during his State of the Nation Address that he wants to continue the tax reform program in the wake of criticisms it caused the spike in commodity prices.

The President said that as of this month, the Department of Finance (DOF) has submitted all five tax reform package proposals to the House of Representatives. Under the Constitution, tax bills must first come from the House of Representatives before these are brought to the Senate.

The second tax reform package will tackle corporate income tax rates and fiscal incentives. The third package aims to lower estate and donor's taxes.

Diokno said senators may still change their mind after Duterte reconvenes the Legislative-Executive Development Advisory Council, where the two branches of government discuss priority bills.

He added tax reform proposals should be passed this year because 2019 is an election year, and lawmakers are aware voters are sensitive to tax bills.

The first package of the administration's tax reform program, passed as Tax Reform for Acceleration and Inclusion (TRAIN) law or or Republic Act No. 10963, lowered personal income tax rates but imposed excise taxes on fuel, luxury motor vehicles, and sweetened beverages.

The Finance Department defended its implementation, saying it was not the only reason why prices breached a five year high in April, when inflation was at 4.5 percent. Inflation continued to pick up from there, and breached another five year high at 5.2 percent in June.

READ: DOF: TRAIN Law not the primary cause of five-year high inflation

The Bangko Sentral ng Pilipinas (BSP) hinted at the possibility of raising interest rates anew in August to temper inflation.

CNN Philippines' digital producer Luchi de Guzman contributed to this story.