Watered-down tax reform bill worries eco**mic officials
 

http://img-s-msn-com.akamaized.net/t...6&q=60&o=f&l=f"We expect the second-quarter GDP to be better," Ernesto M. Pernia, director-general of the National Eco**mic and Development Authority, said in a briefing in Malacañang, even as he declined to give a specific estimate. "Wala pa (There is ** definite estimate yet). We have this current quarter model but we haven't looked at it." Mr. Pernia had given a seven percent preliminary estimate for GDP growth this quarter earlier this month -- sustained from a year ago -- but that was before the government reported January-March expansion at 6.4% -- slower than the 6.6% in 2016's fourth quarter, the year-ago 6.9% and a 6.8% median estimate in a BusinessWorld poll of eco**mists. Mr. Pernia cited as drivers improving agricultural output and merchandise exports that will add to the usual boosts of household spending and private sector investments. Even government spending, he said, which weakened in April, should pick up "in the second quarter and subsequent quarters too." But he aired concern over the first of four tax reform packages that has been watered down and which still awaits plenary approval in both chambers of Congress. The first regular session of the current 17th Congress formally ends on Friday, although actual sessions are expected to end tomorrow. The Department of Finance (DoF) had wanted legislative approval of the first package by "midyear" in order to kick-start funding for substantially increased infrastructure spending that is targeted to total more than P8 trillion from 2017 to 2022. "[Under] the DoF version [net amount from revenue provisions of the first tax reform package] is P162 billion, but with the modifications introduced by the House, it's going to go down to P82 billion. So it's about half. So it's **t good," Mr. Pernia said. "It's **t good... Congress should have passed it in toto," he added. "We will be unable to fund the 'build build build' (infrastructure program of the current administration). It will be small build, small build, small build..." Sought for clarification, Finance Undersecretary Karl Kendrick T. Chua -- who is **w crafting the second tax reform package for possible submission to Congress in the fourth quarter -- said in a mobile phone reply that the projected P44 billion from the first tranche's tax administration provisions is intact. "That is still there," Mr. Chua said. Sought separately for comment, Finance Assistant Secretary Paola A. Alvarez said in Malacañang that the department was keeping its fingers crossed. "'Yung timeline talaga namin is until Wednesday... We want to pass the tax reform in (the) House of Representatives," Ms. Alvarez said. "And then we are working on the window before they start on the next session (that begins of July 24) so we can do necessary amendments. We can brief the senators, kasi naman even if wala sila sa session (they are **t in session), some of them actually ask us to brief them," she explained. "So our goal is by the opening of the second session, nasa Senate na 'yung bill (the bill is with the Senate). We have the whole of the year. We want to have the tax reform bill passed before the year ends so that 'yung lowering ng income tax, we can have it at the start of 2018." Mr. Chua said the department was pinning its hopes on the Senate to restore the first package to its original form. "We will continue to make the case in the Senate on the merits of the original package one," he said. Ms. Alvarez said that should the first package emerge from both chambers of Congress in diluted form, "[w]e'll try to offset with the remaining [three] packages and we'll try to tighten more... tax administration." "... [I]f we get a lower revenue, then we have to limit our infra[structure] spending, we have to limit the social services and it's **t going to be the promise that we had in the beginning."

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