No 'last-minute' changes made in tax reform bill, lawmaker says

Frederick Owens
December 16, 2017

The Philippine congress has ratified the first package of the Comprehensive Tax Reform Program (CTRP) envisioned by the Duterte's administration which seeks to correct a number of deficiencies in the tax system to make it simpler, fairer, and more efficient.

Senator Joel Villanueva on Wednesday expressed dismay over the alleged sudden removal of a provision in the bicameral report of the Tax Reform for Inclusion and Acceleration (TRAIN) bill requiring local coal producers to pay excise tax.

The ratified TRAIN, Angara said, contains provisions that ensures "further reduced" income tax rates.

"There were only about less than 20 members of the House present when the wrecker TRAIN was railroaded for ratification late Wednesday night", Zarate said. "Since there was no quorum and no actual vote was taken, the alleged ratification is clearly invalid", he said.

In a statement, Finance Secretary Carlos Dominguez III said the final approved version of the Tax Reform for Acceleration and Inclusion (TRAIN) Act is expected to generate a fraction of the expected revenues under the bill.

Presidential Spokesman Harry Roque said Malacanang thanked Congress for ratifying theTRAIN bill and the P3.767 trillion budget for 2018 which will both provide sufficient funding for the Duterte administration's priority programs.

Lawmakers said 70 per cent of the revenue that would be generated from the tax measure would go to infrastructure, while the rest would be used for social services.

"Dahil alam natin kapag nagkasakit ang isang tao minsan ay nababangkarote ang buong pamilya (Because we know how one's illness can sometimes lead a whole family into bankruptcy)", Senate Committee on Ways & Means Chairperson Sen.

The lawmakers also decided to increase the rates of the tobacco excise tax from the present P30 per pack to P32.5 in the first half of next year and to P35 starting July 2018 to December 2019.

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The increase in coal tax was originally planned for the DOF's tax reform package five.

Sherwin Gatchalian, Senate committee on energy chairman, said despite his affirmative vote on the ratification of the bicameral conference committee version TRAIN, he still has "strong reservations" against the coal tax provision of the measure.

The House of Representatives had also ratified TRAIN and will be transmitted to President Rodrigo Duterte for his signature.

After a long suspension, the House resumed its session at around 10 pm, after copies of the TRAIN bicam report reached the Batasang Pambansa.

Angara said that milk and three-in-one coffee will remain exempted from sweetened beverage tax, which levies a P6-per-liter excise tax for drinks using local sweeteners and P12-per-liter for beverages using high-fructose corn syrup.

Aside from coal, the final bill also doubled the tax rates of all non-metallic minerals and quarry resources, as well as metallic minerals including copper, gold and chromite from the current 2 percent to 4 percent; and on indigenous petroleum from the current 3 percent to 6 percent.

The two panels agreed to a compromise that would impose excise tax of P50 per metric ton in the first year of implementation; P100 in the second year; and, P150 in the third and succeeding years. Among others, the group has pointed out that the increase on tobacco excise taxes of a mere P2.50 annually is "too small" to help reduce the consumption of the product defeating its purpose of being a health measure.

Likewise, the senator posed a challenge to his colleagues on the looming electricity rate hikes by supporting the passage of a future legislation to cushion the impact of the coal excise tax hike on consumers.

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