Support for scrapping of taxes on fuel, cooperatives mounts

The all-party caucus on Wednesday appeared to have failed to convince congressmen to temper their objection to the controversial tax reform bill as opposition and administration lawmakers demanded a revenue-neutral law that would allow the Duterte government to recover exactly income losses due to the implementation of lower taxes for individual income earners.

As the deadline for the submission of the proposed amendments to House Bill 5736 or the Tax Reform for Acceleration and Inclusion (TRAIN) approaches, a number of congressmen from both the minority and the Malacañang-backed supermajority remain unconvinced that the proposed measure have minimal impact to the lives of the lower-middle income earners and the poorest in the country.

Minority Leader and Quezon Rep. Danilo Suarez and his deputy, ABS Partylist Rep. Eugene de Vera, batted for a bill that would either be revenue neutral or will allow government just enough profit from the new taxes instead of excessively exploiting the measure to raise huge revenues.

Independent Rep. Tobias Tiangco of Navotas City submitted to the House Committee on Ways and Means his list of proposed amendments to the bill. The proposal scrapped all provisions imposing six percent excise taxes on fuel products, particularly liquefied petroleum gas (LPG), kerosene, and diesel. Exemption on cooperatives Deputy Speaker Gwen Garcia said she is backing approval of the Department of Finance tax proposal but would support the scrapping of provisions lifting Expanded Value-Added Tax (EVAT) exemption on cooperatives.

Also pushing for the retention of EVAT exemption on cooperatives are Assistant Majority Leader and Bagong Henerasyon Party-list Rep. Bernadette Herrera-Dy and Reps. Winston Castelo (PDP-Laban, Quezon City); Arlene Arcillas (LP, Laguna); John Bertiz (ACT-OFW Party-list); and Antonio Tinio (ACT Teachers Party-list).

On the other hand, Reps. Alfredo “Albee” Benitez (PDP-Laban, Negros Occidental), Arnolfo “Arnie” Teves Jr. (PDP-Laban, Negros Oriental), and Tiangco want the proposed 110 excise tax on per liter of volume capacity of sugarsweetened beverages scrapped.

Benitez, who heads the organization of Visayan-speaking congressmen, said sugar-producing provinces, mostly in the Visayas, will absorb the impact of increasing taxes on SSBs.

Congressmen lamented that the bill’s noble objective of granting more individual income earners free if not lower taxes has been diluted with provisions that would give government more than half of the foregone revenues it will absorb as a result of the tax benefits.

“Filipinos earning 1250,000 annually will be exempted from tax payments but will have to suffer just the same in absorbing the impact of increased fuel prices, hike in prices of basic commodities and fare,” said Tiangco.

Suarez said a revenue-neutral bill would be most acceptable to lawmakers.

Arcillas, who represents the country’ motor town, Sta. Rosa City, said excise taxes on automobiles is not acceptable for non-luxury vehicles.

“I believe the threshold amount should be increased so that non-luxury vehicles will be spared. I also have reservations on the tax on sweetened beverages, I think the 110 per liter is quite high,” said Arcillas.

De Vera assailed moves to lift VAT exemptions for cooperatives, saying that while government stands to get P5 billion in additional income, it will be at the “great expenses of our cooperatives.”

“VAT, a sales tax, also a pass on tax, as an effect, would increase the prices of the coops by 12 percent, hence, they might find it difficult to compete in the open market,” he pointed out.

For his part Tinio said: “I would like to see the removal of the regressive new taxes, particularly the excise tax on fuel and the expansion of VAT coverage to include cooperatives, low-cost housing and the like.”