By Genalyn Kabiling The government's infrastructure program may be derailed or the economic growth may be dampened if additional tax reform proposals are not passed into law, President Duterte’s top economic manager warned today. Finance Secretary Carlos Dominguez III said they intend to present to Congress the second of the five packages of the Comprehensive Tax Reform Program this month to help prevent the budget deficit from ballooning and sustain infrastructure spending. FILE PHOTO: Finance Secretary Carlos Dominguez III. Albert Garcia/MANILA BULLETIN "Package 1B is crucial to keep the 3 percent of GDP deficit target. To meet this target for the rest of the administration, we will need to pass Packages 2 to 5," Dominguez said during a Palace news conference. "No succeeding packages mean either a breach of this deficit which will hurt our economy or a cut in government spending possibly compromising the President's infrastructure program," he added. Asked if the President will certify the proposed tax measures as urgent, Dominguez said: "I believe so.” President Duterte earlier signed into the law the first package of tax reforms, also known as Tax Reform Acceleration and Inclusion Act (TRAIN). The new law lowers personal income tax but imposes higher taxes on petroleum, tobacco, cars and some sweetened beverages. Under the second package, the government aims to lower corporate income tax rate to 25 percent from the present 30 percent. It also aims to rationalize fiscal incentives. "Within this month, we will submit to Congress our proposal for Package 2 which will lower corporate taxes and modernize fiscal incentives," Dominguez said. He said Package 4 on passive income and financial taxes will be submitted to Congress by July 2018. "Package 3 will be submitted within the year and Package 5, we will see if we will still need revenues from Package 5. Some of Package 5 features have already been included in Package 1," Dominguez added. Meantime, Dominguez defended the administration's TRAIN law, saying it was the first time the main purpose is to help reduce poverty and inequality, and not deficit and debt reduction. He said the tax reform program aims to correct the structural problems of the tax system that made it unfair, complex and inefficient. "Package 1 corrects a longstanding inequity of the tax system by reducing income taxes for 99 percent of income taxpayers, thereby giving them the much-needed relief after 20 years of non-adjustment," he said. Under TRAIN, employees earning an annual taxable income of P250,000 are exempted from paying income tax. The first P90,000 of the 13th month pay and other bonuses is exempt from income tax. Due to the higher excise tax, Dominguez said starting around late January 2018 or early February, the indicative pump price of diesel will be around P35.57 per liter while gasoline will cost P49.82 per liter. He said the inflationary impact of TRAIN will range from 0.3 to 0.7 percent, which he claimed is still manageable. To mitigate the impact of higher oil excise, the government intends to provide cash subsidy to the poorest 10-million household in the country. At least P200 will be given per month in 2018 while P300 per month in 2019 and 2020. The new tax package is expected to generate P786.4 billion in the next five years.