DoF wants House original features of tax bill restored


The Department of Finance (DoF) aims to convince lawmakers to restore the original features of House Bill (HB) 4774 or the Tax Reform for Acceleration and Inclusion Act (TRAIN) before a substitute bill approved early May undergoes plenary deliberations today (Monday).

In a statement over the weekend, the DoF said the House of Representatives is to start plenary deliberations on the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP) that has been co-authored by 102 legislators.

HB 5636—the substitute bill that consolidated HB 4774 with 54 other tax reform proposals—went through first reading on May 15 and was referred to the House Committee on Rules to be scheduled for plenary deliberations this week.

This substitute bill hews closely to the version endorsed by the DOF—HB 4774 –and contains “moderate modifications,” according to Finance Undersecretary Karl Kendrick Chua.

“With strong support from President Duterte and the high officials of the land, with more than 100 co-authors, the support of the more than 100 stakeholder groups, and millions of workers waiting for the reform, this is the time to move decisively,” Chua said.

But the DOF hopes the original features of the HB 4774 will be restored to ensure that the approved version of the House will keep the budget deficit in check and raise enough revenue to fund infrastructure buildup, human capital formation and social protection.

Chua is keeping his fingers crossed that the House would approve the measure before the Congress adjourns this June.

HB 5636 aims to lower personal income taxes for compensation earners and expand the tax base by limiting value-added tax (VAT) exemptions to raw food, education and health and those enjoyed by seniors and persons with disabilities. It also raises the excise tax rates on fuel and automobiles and imposes tax on sugar sweetened beverages.

The original version—HB 4774—does not include the sugar tax, but provides for the DOF-proposed indexation of fuel excise taxes to inflation after three years, but was removed in HB 5636.

HB 5636 also provides for a five-bracket tax scheme on automobile sales, compared to the DOF-endorsed four-tiered structure, and will be implemented in two years starting 2018 instead of the original proposal of full implementation in the first year.

Chua said the modified provisions in the original bill are among the features that he hopes would be restored in the final version.

Earlier, the DoF said the substitute bill will generate lower revenue for the government than originally proposed.
Initial estimates by the agency showed potential revenue from the substitute bill is P82.3 billion in the first year of implementation, or 47 percent down from P157.2 billion the economic managers originally estimated under HB 4774.


Please follow our commenting guidelines.

Comments are closed.