Former Finance officials have urged the Senate to retain original revenue estimates for the proposed Tax Reform for Acceleration and Inclusion (Train) Act, arguing the need to fund government programs and services.
The Department of Finance’s (DoF) Train proposal to lower personal income taxes in exchange for higher sales and excise taxes aimed to net P157 billion during the first year of implementation.
As approved by the House of Representatives, revenues from the measure will be a lower P119.4 billion, while the measure currently up for Senate deliberation will see this drop to just P59.9 billion.
Cabinet officials have warned that reduced revenues would lead to fewer projects being implemented, particularly for those under the Duterte government’s ambitious “Build Build Build” infrastructure program.
Former Finance secretary Roberto de Ocampo said that approving the original DoF measure would improve tax compliance and bring investments that would create more jobs, benefiting the country’s underprivileged sectors.
Another former Finance chief, Margarito Teves, underscored the urgency of passing the Train law to enable the government to finance the country’s growing need for better infrastructure, fill gaps in health and education, and improve social protection programs while keeping the deficit manageable at not more than 3 percent of gross domestic product (GDP).
Former Finance undersecretary Romeo Bernardo, meanwhile, said the original estimated revenue would help fund the government’s plans to provide free tuition at state universities and colleges, pensions for uniformed personnel and increased social security benefits for retirees.
Former Socioeconomic Planning Secretary Felipe Medalla also joined the appeal, saying the Train law would help the country maintain its debt-to-GDP ratio and reduce the cost of borrowing, said to be now lower than that of Malaysia and Indonesia and at par with Thailand.
Moreover, Medalla said that tax reform would shift the burden of paying income taxes from salaried workers to the rich.