By Filane Mikee Cervantes | Philippine News Agency
On Tuesday (April 29), the chairperson of the House Ways and Means committee commended the Department of Finance’s (DOF) decision to withdraw proposed increases in capital gains, donor’s, and estate taxes as a “practical approach” that protects middle-class families while supporting economic stability.
In a statement, Albay Rep. Joey Salceda reported that the DOF opted to shelve the proposal considering that the government is “on track to meet its fiscal consolidation goals” with a “double-digit growth in tax collection.”
The scrapped tax proposals were originally included in the draft Capital Markets Efficiency Promotion Act (CMEPA), intended to strengthen fiscal buffers for economic shocks.
“It takes that kind of practical wisdom to know when to push, when to recalibrate, when to sustain momentum without breaking growth,” Salceda said. “Taxing the transfer of assets more heavily discourages growth-enhancing reallocations.”
Salceda previously warned that higher capital gains taxes could hit middle-class Filipinos the hardest, especially families selling land, passing on inheritance, or starting small businesses.
“Our capital gains tax on land is already six percent of the gross selling price or zonal value—not just the gain. Add documentary stamp taxes. Add local transfer taxes. We are already among the highest in the region,” he said.
“The middle class is the backbone of our economy. We must make it easier, not harder, for them to build wealth across generations,” he added.
Salceda reiterated that the government should focus on taxing luxury consumption if additional revenues were necessary.
“Tax what you can spare, not what you need to grow,” he said.
DOF backs government’s strong fiscal position
Finance Secretary Ralph Recto reaffirmed that the government has no plans to impose new taxes, highlighting the government’s robust fiscal position.
“At this point, current revenues are more than sufficient to support our expenditure requirements,” Recto said. “We are meeting our obligations, funding key programs, and growing the economy without having to impose new taxes on our kababayan.”
Recto noted the 13.55 percent increase in total tax collections during the first quarter, reaching P931.5 billion.
These figures, the DOF chief said, reflected improvements in tax administration, enforcement, and digitalization.
Recto added that while contingency measures have been prepared amid global uncertainties, they are not necessary for now.
“Given our current strong fiscal performance, these are not needed at this time,” he said.
To sustain growth, Recto said the DOF will focus on key reforms such as the CREATE MORE Act, the Ease of Paying Taxes Act, and amendments to laws on foreign investment, retail trade, and public-private partnerships. He also committed to enhancing non-tax revenue sources. (PNA)
