Revenues from the Senate version of the Tax Reform for Acceleration and Inclusion (Train) bill will substantially be lower compared to the measure already approved by the House of Representatives, the Finance department said.
The tax reform bill, now up for plenary debates, is estimated to generate a net P59.9 billion, from total revenues of P192.9 billion and losses of P133 billion, during the first year of implementation.
The expected net revenue from House Bill 5636, on the other hand, is a much higher P119.4 billion.
Both measures cover the first package of tax reforms proposed by the Duterte administation, specifically the lowering of personal income taxes in exchange for higher sales and value-added taxes (VAT) that will be used to fund the “Build Build Build” infrastructure program.
The Finance department said a breakdown of the Senate version showed losses from the reduction of personal income, estate and donors’ taxes hitting P130.2 billion, P1.6 billion and P1.2 billion. respectively.
In terms of revenue, meanwhile, P14 billion will come from VAT, P40 billion from petroleum excise taxes, P14.9 billion from automobile excise taxes, P37.4 billion from sugar sweetened beverages and P43.8 billion from tax administration.
Complementary measures such as motor vehicle users’ charges and an estate tax amnesty are expected to generate another P12.9 billion and P6 billion, respectively.
The Senate version will also generate P23.9 billion from higher taxes on cosmetics, coal, foreign currency deposit units, capital gains on non-traded stock and dividends, the Finance department said.