THE head of the Senate economic affairs committee over the weekend said delay in passage of the proposed Tax Reform for Acceleration and Inclusion Act (Train) will have little effect on the ambitious infrastructure program of the Duterte administration.
Senator Sherwin Gatchalian, chairman of the committee, noted that the proposed tax reform measure being pushed by the government is only one component in the P8-trillion “Build Build Build” program.
“In fact in my own estimate, it will only generate probably 20 percent of the P8 trillion,” Gatchalian said in an interview.
The senator added that while the Senate is committed to passing the Train bill as soon as possible, it also has a responsibility to thoroughly study the measure and make sure that it would be beneficial to the government and the public.
He, however, said that unless concerned government agencies provide the Senate needed data and documents that would help senators study the proposal, it would be difficult for them to pass the bill.
Gatchalian added that last-minute inclusion of the P10 excise tax on sugar-sweetened beverages in the House of Representatives’ version of the Train bill could also cause delays in the Senate because they also need to study it.
Former lawmaker Rene Diaz, now chairman of the Center for Strategic Initiatives, last week said the Senate needs to fast-track the passage of the Train bill so that the government’s development plans could be achieved at the soonest possible time.
The proposed tax reform measure aims to lower personal income tax, adjust excise taxes on fuel and automobiles and broaden the value-added tax base by limiting exemptions to raw food and other necessities such as health and education while keeping the current zero-tax privileges of senior citizens and persons with disability.
It seeks among others increase in excise tax being imposed by the government on regular gasoline and other products to P10 per liter.
For diesel, kerosene, liquefied petroleum gas (LPG) and other products that are currently exempted from excise tax, a P6 per liter excise tax would be imposed that could result in an increase of P6 per liter on these petroleum products by 2019.
According to Gatchalian, even if Congress passed the Train bill, it could only generate about P400 to P500 billion, which is too small compared to the required P8 trillion for the five-year infrastructure program.
“So the big source for the program will have to come from loan and ODA [official development assistance],” he said.
The senator added that even if the passage of the bill was delayed, the government could still enter into grants and loans being offered by different countries like China but the administration must make sure that the loans are not disadvantageous to the government.
In order to speed up committee deliberations on the proposed tax law, Sen. Juan Edgardo Angara had asked the concerned government agencies to submit a list of priority projects, financing sources and timelines so that the Senate would have an clear picture of the government’s infrastructure goals.
Angara, chairman of the ways and means committee, said his committee needs the list so that “we can be on the same page regarding infrastructure goals.”