The Senate is unlikely to adopt the entirety of the government’s first comprehensive tax reform package, a legislator said on Wednesday.
“There’s some changes … But more or less it’s maybe 50 percent to 60 percent or 70 percent of what the DoF (Department of Finance) proposed,” ways and means committee chairman Sen. Juan Edgardo Angara told reporters at the sidelines of a Senate hearing.
The first package, also known as the Tax Reform for Acceleration and Inclusion Act (Train), calls for lower personal income tax rates in exchange for a wider value-added tax (VAT) base and higher excise taxes on fuel and cars, among others.
The House of Representatives approved its version of the Train—House Bill 5636—in May 31 via an overwhelming vote of 246-9 with one abstention.
The Senate is currently tackling its version, Senate Bill 1408, and reconciling this with HB 5636.
Angara said some changes would involve lowering the proposed sugar sweetened beverage tax to P5 per liter from P10 per liter, staggering the implementation of the fuel tax hike and the retaining VAT exemptions for housing and renewable energy.
The potential revenue from the Senate version, he claimed, would be about P130 billion or about the same as the P133.8 billion estimated by the Finance department.
For his part, Finance Undersecretary Karl Kendrick Chua said the government remained hopeful that the Senate would adopt the DoF’s original proposal.
“The potential revenue had been already incorporated in the 2018 national budget. So if the Senate cut something, they have to find some alternative,” he said.
Chua added that the government also needed the additional revenues to fund the free tuition law and the rebuilding of Marawi City.
“As much as possible we want them also to consider the bigger picture,” he said.