Train bill hits snag

THE Senate was not able to ratify the report of the bicameral conference committee on the Tax Reform for Acceleration and Inclusion ( TRAIN) measure on Tuesday because some issues needed to be straightened out.

Senate Majority leader Vicente Sotto 3rd said members of the bicam panel were still checking and straightening out the final version of the tax reform measure that seeks to provide the government additional revenues.

The draft report aims to lower tax on income earners and small businesses but impose higher taxes on unhealthy products such as sweetened beverages and tobacco.

Among the revisions in the draft version of the committee report was the 16 percent increase on the excise tax of tobacco starting January 2018 which was not originally included in both versions of the Train bill.

Under the proposed tobacco excise tax provision, Congress wants to raise cigarette tax from P30 to P32 per pack from January to June 2018; and adjust it to P35 beginning July 2018.

From 2020 to 2021, tobacco excise tax will be increased to P37.50 and to P40 on 2022 to 2023 while a four percent annual indexation will be imposed by 2023 onwards.

Tobacco farmers in a statement lamented that last minute adjustment on tobacco tax introduced by congress would add burden to the industry.

The Philippine Tobacco Growers Association (PTGA) said its appeal to lawmakers to give the industry respite from successive tax hikes fell on deaf ears.

Lawmakers during the bicam meeting agreed to increase the coal excise tax from P10 per metric ton to P50 per metric ton in the first year of implementation, P100 in the second year, and P150 in the third and succeeding years.

The P10 coal excise tax rate has remained unchanged since 1988 while the local industry has been exempted from paying excise tax since 1976.

Congress also introduced new rates on the excise tax of all non-metallic minerals and quarry resources, and all metallic minerals including copper, gold and chromite from the current two percent to four percent; and on indigenous petroleum from the current three percent to six percent.

Lawmakers also came up with a simpler tax scheme for automobile excise tax that is easier to administer while retaining progressive rates.

Under the rates approved by bicam committee, vehicles with net value of up to P600,000 will be taxed at our percent, while automobiles priced at P600,000 but not more than P1 million will be taxed at 10 percent, those that are valued above P1 million but not more than P4 million will be taxed at P20 percent and vehicles above P4 million will be taxed 50 percent.

But lawmakers agreed to include pickups on the list of tax exempt vehicles along with electric vehicles.

Lawmakers also agreed to increase taxes per liter on petroleum products but managed to keep it to a minimum. LPG will be taxed at P1 by next year, P2 by 2019 and P3 by 2020 onwards.

Diesel on the other hand will be taxed P2.50 on the first year of implementation, P4.50 by 2019 and P6 by 2020 onwards, while gasoline excise tax will be raised to P7 from P4.35 starting 2018, P9 by 2019 and P10 by 2020 onwards.

Sugar sweetened beverages will be taxed P6 per liter for those using caloric and non- caloric sweeteners, and P12 per liter for drinks using high fructose corn syrup (HFCS).

The Senate is expected to ratify the report today.