Today, former Senator, former NEDA Secretary, Congressman and Deputy Speaker until this week, is new Secretary of the Dept. of Finance (DOF) Ralph G. Recto. He took his oath before the President today.
Meanwhile, below are two of my previous columns in BusinessWorld where I mentioned and discussed the market-oriented moves of then Senator Ralph Recto. Enjoy.
(1) Senator Recto’s tax cut plan shadows Reagan, Thatcher, and Trump tax cuts (November 23, 2020), https://www.bworldonline.com/senator-rectos-tax-cut-plan-shadows-reagan-thatcher-and-trump-tax-cuts/
... Now Senate President Pro-Tempore Ralph G. Recto has proposed more liberal fiscal incentives and deeper tax cuts as he sees the degree of tax competition in the ASEAN. To save space, here is a summary of contentions on reforming the fiscal incentives (see Table 2)....
The Senator also proposes two-tiers of CIT. Tier 1, companies with total assets not over P100 million, their first P5 million taxable income will pay only 20% while profits above P5 million will be taxed 25%. And Tier 2, companies with total assets over P100 million will also pay 25% CIT. That 20% CIT proposal is very good.
Furthermore, the Senator proposes other liberal provisions: 1.) raise the threshold VAT exemption on housing for residential lots from P1.5 million to P2.5 million, and for house and lot from P2.5 million to P4.2 million; 2.) suspend the minimum CIT (MCIT) from 2020 to 2022 and cut rate from 2% to 1% from 2023 onwards; and, 3.) just 1% income tax for private, non-profit educational institutions and hospitals for three years.
Good proposals by the good Senator. So is he the “Donald Trump of the Philippines” as sensationalized by AER?...
Donald Trump is the first US President to continue Reagan’s tax cut. Trump inherited the high CIT 35% in 2017 and introduced tax cuts to 21% by 2018. From 2017-2019, the average yearly GDP growth of the US was 2.5%, higher than fellow rich countries with no tax cuts: Canada 2.3%, France 1.9%, the UK 1.6%, Germany 1.5%, Japan 1%, Italy 0.9%.
(2) Market-oriented reforms in the Senate (November 20, 2018)
https://www.bworldonline.com/market-oriented-reforms-in-the-senate/
... Sen. Ralph Recto... approved SB 1896, he inserted this provision: “PhilHealth shall provide additional NHIP benefits for direct contributors, where applicable.… the two-tiered benefit scheme will also exacerbate health inequity in the country.”
This market-oriented reform initiated by the Senator is correct. There should be a two- or multiple-tiered system in health care, inequality in contribution should lead to inequality in getting benefits. Socialism wants inequality in contribution but equality in social results.
If people can afford to buy alcohol, tobacco, fatty food, nice cellphones, etc., it is assumed that they should also have some resources to buy health insurance that will augment state-sponsored health care....
SB 2073 by Sen. Ralph Recto intends to lift this obligatory and coercive training that costs professionals huge money. R.A. 10912 or the CPD Act of 2016 requires professionals to earn 45 CPD units of seminars and trainings that cost between P10,000 to P30,000 per person every three years, otherwise they cannot renew their PRC license.
That CPD Act and its mandatory order is lousy for at least two reasons: (a) Professionals normally attend various seminars, conferences and trainings in the course of their work, and (b) the market, the customers are the best judges and natural regulators. Lousy professionals are punished by customer dissatisfaction that is easily spread through social media, they lose clients.
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