Eighty-three percent of the P8.4 trillion needed for implementing the government’s massive infrastructure program will come from foreign borrowings, not from the proposed Tax Reform for Acceleration and Inclusion (Train), according to Sen. Juan Edgardo Angara.
Angara had dismissed as “exaggerated” the claims of some officials from the executive department who were quoted in media as saying that the “Build, Build, Build” program of the Duterte administration would be severely affected if the Senate failed to pass a tax reform measure closer to the House-approved Train version.
He made the clarification on Monday when Sen. Paolo Benigno Aquino 4th interpellated him on reports equating revenue target for the Train with the P8.4-trillion funding requirement for the infrastructure program.
“No. That is the target for infrastructure development but not all will be sourced from the Train,” Angara, chairman of the Senate Committee on Ways and Means, said.
The author of the Senate version of the Train added that the P8.4-trillion budget for Build, Build, Build includes borrowings.
He said only one-third of the required fund for the infrastructure program would be funded by the Train.
“That’s around P2.7 trillion over five years and that would include five packages that are going to be proposed by the Department of Finance (DoF),” Angara added.
“We are now dealing with Package 1. The rest would be for ODA [overseas development assistance], as well as PPPs [public-private partnerships] that would total around P5.6 trillion,” he said.
Angara expressed surprise at the “new” revenue estimates released by the DoF regarding revenue gain from the Senate version of the comprehensive tax reform measure.
The Finance department said the Senate’s Train will only yield P59.9 billion.
“We are surprised with the DoF’s new revenue estimates. It seems that [its]figures are changing,” Angara said.
“Even the revenue impact of House Bill 5636 was reduced to P119 billion from earlier estimates of P133.8 billion.The DoF supplied all the figures that the Senate ways and means committee used for its version,” he added.
“And, as far as the committee’s computation right before filing its report is concerned, the revenue impact is almost the same as [that in]the House version,” Angara said.
He added that the committee sought to come up with a version that would provide tax relief to 99 percent of individual taxpayers and, at the same time, meet the revenue target so as not to impair the government’s capability to finance its programs and projects.
“We have asked the DoF to provide final and detailed estimates to guide the committee’s work especially on the lifting of VAT [value-added tax] exemptions,” the senator said.
Previously discussed exemptions had “little revenue impact… but are now presented as sizable revenue items,” he added.
“This will change the committee’s consideration of certain items going forward. There is still room for compromise on the lifting of other VAT exemptions,” Angara said.
He added that the filing of the committee report is just the first step for the Train to proceed in the Senate.
“The committee can adjust accordingly to meet the needed revenue,” according to the senator.
“Our colleagues have already signified, together with their signatures on the report, that they will interpellate and introduce amendments to the bill. The committee is open to amendments that our colleagues will propose to enhance Train’s benefits to the people,” Angara said.
The bicameral conference committee will reconcile the House and Senate versions, before sending the final version to the President for his signature.