THE Management Association of the Philippines (MAP) urged Congress and President Ferdinand R. Marcos, Jr. to halt tax increases meant to sustaining government expenditure, citing the need to fix what it described as wasteful spending.
MAP rejected the need to raise estate, donor’s, and capital gains taxes on the transfer of property classified as capital assets, which it said is being contemplated by the Department of Finance (DoF).
“Instead of implementing much-needed reforms to cut wasteful expenditures, reduce bureaucratic inefficiencies, and curb corruption, the administration continues to burden law-abiding citizens with higher taxes,” it said in a letter addressed to Mr. Marcos dated Feb. 7.
Finance Secretary Ralph G. Recto in December 2024 pushed for a tweaked fourth package of the Comprehensive Tax Reform Program, which was initiated in 2018.
Mr. Recto also urged legislators to consider the tweaks instead of the now-approved Capital Markets Efficiency Promotions Act (CMEPA), which was ratified by the House of Representatives and Senate last week. The proposal seeks to cut stock transaction tax to 0.1% from 0.6% to boost Philippine capital markets.
The DoF’s Government Revenues Optimization through Wealth Tax Harmonization (GROWTH) proposal could yield about P300 billion by 2030, the DoF said in a letter to the Senate last year.
“The proposed increase in estate and donor’s taxes, as well as the proposed increase in capital gains tax on transfers of real properties classified as capital assets, from 6% to 10%… is not only unjust but also detrimental to economic growth, wealth transfer and the financial well-being of Filipino families,” MAP said in its letter.
“There was a proposal to this effect during the bicameral panel of CMEPA that would have increased estate and donor’s taxes. We jointly decided to set it aside for now,” Albay Rep. Jose Maria Clemente S. Salceda, who heads the House tax panel and is a member of the bicameral conference committee that harmonized the capital markets reform bill, told BusinessWorld via Viber.
The government should instead look at fully implementing the Real Property Valuation and Assessment Reform Act and adjust car users’ tax rates before touching transfer tax rates, he added.
“I will study the GROWTH proposal when it’s forwarded to the House. But right now, there is no constituency for higher transfer taxes,” Mr. Salceda said.
MAP also pushed the government to rein in what it sees as “excessive government spending” before raising taxes.
“Instead of taxing inheritance further, the government should focus on streamlining tax collection, eliminating unnecessary projects, and prioritizing essential services that truly benefit the people,” it said, urging the government to practice “responsible” fiscal management. — Kenneth Christiane L. Basilio