Senate version of tax reform to yield P59.9 B

The Senate’s version of the tax reform bill may yield P59.9 billion in additional revenues in the first year of its implementation, way below the projected revenue programmed in the 2018 national budget, initial estimates from the Department of Finance (DOF) showed.

In a text message, Finance Undersecretary Karl Kendrick Chua said Senate Bill 1592, or the Senate’s version of the Tax Reform for Acceleration and Inclusion Act, is estimated to have a net gain of P59.9 billion.

The figure is 55.23 percent lower than the P133.8 billion estimated net gain from the House of Representatives version of the bill (House Bill 5636), which has already been programmed in the 2018 national budget.

Based on data from the DOF, the projected revenue from the removal of VAT exemptions under the Senate bill will be P14 billion in the first year of its implementation, lower than the House version’s P80.9 billion and the DOF version’s P89.2 billion.

Provisions on oil excise taxes under the Senate version is also expected to generate P40 billion, also lower than the House version’s P73.7 billion and the DOF version’s P74.4 billion.

Aside from these, the projected revenue from the sugarsweetened beverages was also lowered to P37.4 billion as SB 1592 cut the sugary beverage’s excise tax to P5 per liter from the original proposal of P10 per liter.

DOF estimates also showed that additional measures provided under the bill, including tax on cosmetics, coal, foreign currency deposit units, capital gains of non-traded stocks, and dividends, may yield P23.9 billion in incremental revenue.

However, this was not enough to offset the losses from the adjustments made by the Senate in the revenuegenerating measures of the bill.

In an earlier interview, Chua said the DOF would ask the Senate to adjust the bill if the projected revenue is below that of the House of Representatives’ version.

“The senators are willing to (compromise) once we have the revenues. They are willing to take another look,” he had said.