House approves tax reform package on final reading
With President Rodrigo Duterte’s certification of urgency, the House of Representatives approved on second and third reading the administration’s first tax reform package yesterday.
With 246 votes in the affirmative, nine negative and one abstention, the lower chamber approved House Bill 5636, otherwise known as the Tax Reform for Acceleration and Inclusion (Train) program.
With the President’s certification, the House can vote on third reading immediately after the second reading.
The Train bill seeks to lower personal income tax (PIT) rates while broadening the tax base through reforms in consumption taxes such as the Value-Added Tax (VAT) and the excise taxes on automobiles and fuel.
Amendments
One relevant change in the amended version of the bill is the retention of VAT exemptions for cooperatives, particularly on sales by agricultural cooperatives, sales by non-agricultural, non-electric and non-credit cooperatives, and gross receipts from lending activities by credit or multi-purpose cooperatives.
Furthermore, the removal of VAT exemption for socialized housing will be conditioned upon the establishment of a hosing voucher system which shall benefit buyers of socialized housing.
There is also an increase in the tax exemption for the 13th month pay and other benefits from P82,000 to P100,000.
The eight percent tax on the self-employed and professionals will now only be imposed on gross receipts in excess of P250,000.
Meanwhile, the allocation of 40 percent of the yearly incremental revenues generated from the excise tax on petroleum products for the purpose of a social benefits program will now be for four years from the intended three years. /