‘TRABAHO’ AT THE SENATE UNLIKELY
Sen. Paolo Benigno Aquino IV, who was in Cebu on Saturday, Nov. 10, for a talk with micro and small entrepreneurs, says the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill will probably not pass in the Senate
Sen. Paolo Benigno “Bam” Aquino IV on Saturday, Nov. 10, said the government’s second tax reform package will have difficulty passing in the Senate level, saying many businesses are not in favor of it.
“(It) will have a hard time in the Senate. I don’t see a time table that it will be passed anytime soon,” said Aquino in an interview shortly after his talk during the Ramon Aboitiz Foundation Inc.’s (Rafi) Entrepreneur Summit at the Cebu Grand Convention Center.
Aquino said many business organizations are worried that the Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill would have a negative effect on their businesses and their future expansions in the Philippines. He cited the negative sentiments of Japanese firms located in the economic zone in Cebu.
“Clearly, there are oppositions about it,” said Aquino, adding that some lawmakers are thinking twice about supporting the second tranche, knowing that there were promises made in the first tax reform package that were not realized.
The House of Representatives passed their version of the bill. Its priority measure seeks to encourage investments by bringing down the corporate income tax (CIT) rate from 30 percent to 20 percent.
The bill also seeks to modernize investment tax incentives to enhance fairness, improve competitiveness, plug tax leaks and attain fiscal sustainability.
The taxes collected under this program will be used to fund the government’s Build, Build, Build program.
During his keynote message before micro and small entrepreneurs in Cebu, Aquino also renewed the call for the suspension of excise tax on fuel products under the Tax Reform for Acceleration and Inclusion (Train) Law.
He said these are “more pressing concerns” that lawmakers should immediately decide on, as time is running out, with only 15 session days remaining for the year.
The Senate and House of Representatives will resume session on Monday, Nov. 12, and will adjourn a month after on Dec. 12.
Aquino said that anywhere he goes, farmers, small vendors and fisherfolk complain about the high spike in consumer goods and that stopping the excise tax on fuel under the government’s Train program would largely benefit everyone.
According to the senator, removing the excise tax on fuel would not only bring down prices of fuel, but also prices of fares, food and other goods in the market.
Aquino filed Senate Bill 1798, or the Bawas Presyo sa Petrolyo bill, in May while minority senators filed Joint Resolution 15 calling for the suspension and rollback of excise tax on fuel.
Majority lawmakers, for their part, wrote President Duterte asking to suspend the excise tax on fuel under the Train Law.
The Train Law specifically states that the collection of excise taxes on oil products will be automatically suspended when the price of imported crude oil reaches the $80-per-barrel level for three consecutive months.
The collection of an additional P2 per liter in petroleum products in 2019 will be suspended for at least three months. But Aquino said the short-term suspension is not enough for consumers to feel its effect, especially in the movement of consumer prices.
In a separate press briefing during the Sulong Pilipinas 2018-Philippine Development Forum in Cebu on Friday, Nov. 9, Finance Undersecretary Karl Kendrick Chua said they await the official announcement of President Rodrigo Duterte on the suspension of excise tax for 2019 and on regulations that come with the suspension.
“The next increase of the excise (tax) has been made and we are waiting for the President to officially announce it,” said Chua.
“Since the law says we are waiting for the three-month period prior to the suspension, we are also looking possibly at a three-month interval to determine how long the suspension will take place, because by definition, the suspension is temporary. So we are preparing the regulations to determine that,” he said.
Based on its computation, the Department of Finance said the country may potentially lose around P41.6 billion in revenues if the suspension will last for several months a year.
Moreover, Chua urged the stakeholders in Cebu to look at the Train Law as an entire package where everyone pays and contributes, not only a certain sector.
Around 1.4 million jobs are expected to be created between 2021 and 2029, when the CIT will have been cut by a third to 20 percent under the second package of the tax reform.