• House approves first package of tax reform

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    A bill exempting workers earning P250,000 and below a year from income tax and hikes the excise tax on all kinds of fuel to P10 per liter from P6 passed third and final reading in the House of Representatives on Wednesday.

    The House, with 246 yes votes, nine no votes and one abstention, approved House Bill 5636 or the Tax Reform Acceleration and Inclusion (Train) bill.

    The bill also increases the maximum amount of tax-exempt 13th month pay and bonuses to P100,000 from P82,000.

    It likewise exempts self-employed and other professionals earning P250,000 a year from income tax. However, they will have to pay an 8-percent tax on gross receipts in excess of P250,000.

    Other provisions include the retention of the value-added tax exemption on cooperatives and subsidies for qualified beneficiaries of the Social Benefits Program for four years, to be sourced from 40 percent of revenues generated from increased excise taxes on petroleum products, estimated at P48 billion.

    The remaining 60 percent will be allocated proportionally, based on existing budget allocations, to infrastructure, health, education, housing, and social protection expenditures.

    Infrastructure allocation will be prioritized, to finance the Duterte administration’s P8-trillion “Build, Build, Build” program, lawmakers said.

    A business process outsourcing (BPO) sector advocate called for the speedy congressional approval of the bill, which he described as a “win-win” for both labor and management as it will raise the take-home pay of workers and enhance the workplace environment.

    Gerald Catapang, administrator of the Facebook page Call Center Philippines, said the bill is also a “win” even for non-workers because alongside slashing income tax rates, the measure will adjust other taxes to help the Duterte administration raise the extra P1 trillion it needs yearly for an aggressive spending program to improve the living standards of poor and low-income Filipinos.

    “Reforming our personal income tax system will increase the monthly take home pay of call center agents by an average of P4,000, while adjusting other taxes will increase funding for health, training, and infrastructure investments crucial for the working environment of laborers,”

    Senators decry ‘pressure’

    With the bill going to the Senate, some senators decried on Wednesday an apparent effort by the Executive department to pressure Congress into passing the tax reform bill immediately.

    “We don’t appreciate the pressure coming from the Executive branch because we are doing our best here. But, it seems like we’re being set up for failure,” said Sen. Juan Edgardo Angara, chairman of the Senate Committee on Ways and Means.

    He was reacting to the warning of Socioeconomic Planning Secretary Ernesto Pernia on Tuesday of a failure to achieve the “golden age of infrastructure” if Congress fails to pass the bill.

    “We don’t appreciate those kinds of pronouncements from the Executive. That makes it appear that they’re trying to put us in a corner,” the senator said.

    Angara said he was not convinced the non-passage of the tax reform bill would be costly to the country’s economy, noting that the previous administration was able to build infrastructure and expand the economy by six percent only by raising excise taxes on “sin” products.

    The President has certified the tax reform measure as urgent.

    “I think we can come up with a measure in the next few months. It’s just that it may not be exactly what is being pushed by the Executive,” Angara said.

    Senate Minority Leader Franklin Drilon said he would not let Pernia’s warning prevent him from scrutinizing the tax reform bill.

    “I have been here (Senate) for 15 years studying the budget. I do not claim expertise but certainly we know something about the budget. If Pernia’s statement is accurate, I find that arrogant,” he added.

    with JEFFERSON ANTIPORDA

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