MANILA – Further push for the eventual approval of the other tax reform measures of the Duterte administration is expected following Fitch Ratings’ decision to downgrade its outlook on the country’s investment grade rating.
During the company’s virtual briefing on Wednesday, First Metro Investment Corporation (FMIC) research head and first vice president Cristina Ulang said reform measures, not just government spending, are among the factors for Fitch Ratings’ move to change its outlook on the country’s BBB rating from stable to negative.
She is referring to the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA) and the property taxes, which are now in the Senate and are part of Package 4 of the Comprehensive Tax Reform Program (CTRP), which is now called the Tax Reform for Acceleration and Inclusion Act (TRAIN) law.
“So I think, there’s going to be a speed up, an urgency for the government to pass all of these taxation because this is what’s really going to help our budget deficit and then support the spending if need be,” she added.
Ulang said these factors are closely watched by credit rating agencies because these will improve the efficiency of the taxation process and the expansion of the tax base.
She said these proposed measures are not particularly aimed at increasing taxes but expanding the tax base and improving tax administration efficiency.
These measures will make the country’s tax structure “more fair and equitable to all” and will encourage more foreign direct investors, she added. (PNA)
