Tax reform package hurdles ways and means committee
THE FINANCE department’s comprehensive tax reform program moved forward largely unaltered after gaining approval from the House ways and means committee, but remained subject to possible modification by another committee.
After eight hearings and five technical working group (TWG) meetings since ways and means took up the bill at the start of the year, the committee voted to approve yesterday the unnumbered substitute bill of the Tax Reform for Acceleration and Inclusion Act (TRAIN).
The substitute bill was the output of the TWG, which harmonized legislation similar to the originally-filed House Bill 4774.
The bill however has yet to go through the committee of appropriations and will be transmitted back to the mother committee for final approval before it hits the floor.
“TWG report on TRAIN, after five long meetings of the group which started during the break, the TWG has come up with a draft substitute bill. However due to the large scope of the bill, it recognizes the need for further refinement,” said House ways and means committee Rep. Dakila Carlo E. Cua (Quirino).
“We will refer it to the appropriations committee for review on appropriations, then referred back for further refinement,” he said.
When it returns at the ways and means committee, stakeholders will still be allowed to air their concerns further.
A copy of the bill was not available, but Finance Secretary Karl Kendrick T. Chua said that most of its proposed measures were unchanged.
“The most important ones were not touched. They were filed as proposed, so the oil excise proceeds as planned except for indexation after three years. The value- added tax ( VAT) exemptions are mostly moved so that the VAT can be fair,” he said.
“The auto (excise tax)… I think they made it from four to five brackets, then two year implementation,” he added.
Mr. Chua said: “We made substantial progress today.. So the target is to finish it within this session, this coming four weeks of session.”
The tax reform program features a reduction in personal income taxes, the removal of some VAT exemptions, and hiking excise taxes on automobiles and petroleum products.
SUGAR TAX
Meanwhile, lawmakers also considered the inclusion of the sugar tax in the first package of the comprehensive tax reform program — as a measure to promote health, and to boost revenue.
House Bill 292 seeks to impose an excise tax of P10 per liter on sugar-sweetened beverages.
Author Estrellita B. Suansing (first district, Nueva Ecija), said that the tax hike will force the beverage industry to be creative and come up with healthier beverages for the public.
The measure is expected to generate P39.6 billion in additional revenue.
Ms. Suansing said that additional funds will go to strengthening the feeding program in public schools, provide drinking fountains in public places, and building sports facilities.
Beverage Industry Association of the Philippines (BIAP) Executive Director Roman T. Romulo said that the tax would be too burdensome for the beverage industry.
With the measure already in its third round at the committee, the dearth of data on sugarydrink consumption led to the suspension of deliberations, though the committee did not rule out its inclusion in the comprehensive tax reform program after future deliberations.
The Department of Finance plans to propose a tax on sugary beverages in its third package of the tax reform program. It also plans to propose the lowering of corporate income tax rates as part of its second package.