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IMF pushes higher cigarette tax, scrapping of incentives 

THE INTERNATIONAL MONETARY FUND has urged the government to enact pending tax reform bills, warning that the recent move to exempt minimum wage earners from income tax and the cut in corporate income tax next year could erode revenue collections.

The government has made progress in terms of meeting tax collection targets in the first half, the IMF acknowledged. However, it said this would be unsustainable if no measures would be adopted to offset the impact of lower income tax collection. . . .

The IMF said Congress should pass bills seeking to lift unnecessary tax- and duty-free privileges granted to businesses and increasing excise taxes on cigarettes to maintain, if not accelerate, the growth in tax collection.

Without these measures, the IMF said the tax relief granted to individual and corporate taxpayers could easily slash half a percentage point from the country’s tax effort.

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