House panel targets tax reform approval by March session break

THE House ways and means committee aims to pass the Department of Finance-backed comprehensive tax reform package before the chamber takes a break in mid-March, its chairman said.

“Before the break, at least we intend to hurdle the committee level,” Quirino Rep. Dakila Carlo E. Cua, committee chairman, told reporters at the sidelines of the House plenary session on Monday night, adding that: “Of course you cannot promise anything because the legislation will be subject to voting.”

The House of Representatives will recess on March 17 and sessions will resume on May 1.

The ways and means committee is also set to hold the fifth deliberation on House Bill 4774 today, which was drafted by the Finance department and was filed by Mr. Cua, zeroing in on the provision pertaining to lowering personal income taxes.

The committee previously discussed the provisions on additional tax on oil and petroleum products, value-added tax breaks given to certain sectors, additional excise taxes on automobiles, and provisions pertaining to tax administrative measures included in the bill.

For today’s hearing, the committee has invited officials from the Departments of Finance, Labor and Employment, and Bureau of Internal Revenue. Officials from business chambers, employers groups, labor groups and nongovernment organizations and think tanks are likewise invited.

Mr. Cua said that the committee will also schedule hearings on the tax package as a whole to hear out comments or proposed amendments from other lawmakers.

“And in order to cover everything, if ever there are parts that were glossed over, we will have hearings on the bill as a whole so that everything you want to ask, everything you want to clarify or proposed amendments will be discussed,” said Mr. Cua.

The first tax reform package seeks to exempt those earning an annual income of less than P250,000 from paying personal income tax. The lowest rate is 20%, to be paid by individuals earning between P250,000 to P400,000 annually. The “ultra-rich,” or those earning more than P5 million, are to be taxed at 35%, against the current 32% rate for the top bracket.

The Finance department pegged the revenue losses from lowering the personal income tax at around P139.6 billion in the first full year of implementation, a shortfall that will be plugged by expanding the VAT base by limiting exemptions on raw food and other necessities such as education and health care, raising excise tax rates on petroleum products and restructuring the excise tax on automobiles.

The Finance department said that the first package is estimated to yield P206.8 billion in its first year of implementation: P162.5 billion from reforming the tax rates and P44.3 billion from legislated tax administration reform. —