DOF sees 140-B revenues from TRAIN 1-B measure
The Department of Finance (DOF) is confident that the second part of the first tax reform law will be enough to generate close to R40 billion in revenues this year.
Based on a DOF document obtained by the Manila Bulletin, the Bureau of Internal Revenue (BIR) expects the Tax Reform for Acceleration and Inclusion Act (TRAIN) 1-B would raise R38.9 billion this year.
About 38.56 percent of that amount will be generated once the bank secrecy law is relaxed for tax purposes along with the proposed automatic exchange of information, the DOF document showed.
According the fiscal authorities, the relaxation of bank secrecy and automatic exchange of information would easily raise P15 billion in revenues during its first year of implementation.
Finance Secretary Carlos G. Dominguez III had said the easing of the bank secrecy law could unlock billions of pesos kept away from the government authorities, noting the country’s bank secrecy law is among the world’s most restrictive regulations.
The Philippines together with Lebanon and Switzerland are the only countries in the world that have a bank secrecy law.
The Philippines and Lebanon, meanwhile, are the two remaining countries in the world where tax evasion is not a predicate crime in anti-money laundering activities.
Meanwhile, the proposed granting of a general tax amnesty is estimated to account for about 34.96 percent of the expected revenues from TRAIN 1-B.
Once individuals and corporations with outstanding tax liabilities settled their deficiencies with the government, the DOF estimated that it would bring in R13.6 billion to state coffers.
On top of the revenues from the general amnesty, the DOF is also expecting around R6 billion from the proposed estate tax amnesty, which is also under the Duterte administration’s tax reform package 1-B.
The estate tax amnesty will account for about 15.42 percent of the projected revenues from TRAIN 1-B.
Lastly, the proposed increase in the motor vehicle user’s charge and its indexation to inflation would raise R4.3 billion this year, or 11.05 percent of the total TRAIN 1-B.
Last week, Dominguez said that they were confident that Congress can pass the Duterte administration’s proposed tax administration measures under the first tax reform law before March this year.
Finance Undersecretary Karl Kendrick T. Chua said that the Senate is expected to come up with the committee report on TRAIN 1-B this week.
Chua said that Package 1-B will no longer require approval of the House of Representatives, noting the remaining measures are already incorporated in the lower chamber’s approved-tax reform version, or House Bill No. 5636.
After next week, the DOF official said the Senate ways and means committee will then submit the report for plenary deliberations.
Chua, however, clarified that the motor vehicle user’s charge will be tackled separate from package 1-B by Congress.
Asked when the DOF expects the Congress to pass its package 1-B, Chua said “they said within the first-quarter, it will be enacted.”
“Once we have the committee report, the plenary of the