MANILA, Philippines — The Senate aims to ratify next week the Tax Reform for Acceleration and Inclusion (TRAIN) bill that is expected to raise some P148 billion in fresh revenues, Senate President Aquilino Pimentel III said yesterday.
Pimentel said the TRAIN is vital to the Duterte administration’s plan to jumpstart the economy through its P8-trillion “Build, Build, Build” infrastructure program.
He said the plan is to pass the tax reform bill before Congress takes a break on Oct. 13.
Any conflicting provisions between the version of the Senate and the House of Representatives can be resolved during the bicameral conference committee meetings of the two chambers during the break.
“We’ll do our best (to pass it),” Pimentel said.
Plenary debates on the TRAIN bill started last week after it was sponsored on the floor by Sen. Sonny Angara, chairman of the Senate ways and means committee.
Angara said among the TRAIN’s salient features is a higher take- home pay that as much as 99 percent of workers will enjoy without sacrificing the goal of raising revenues to boost growth.
“Finally, after 20 long and arduous years, our workers will have more take-home pay. We want more Filipinos to have higher purchasing power… join the ranks of the economically well-off,” Angara said in his sponsorship speech.
“This TRAIN needs to get moving but we make sure that Filipinos are onboard when it does,” he added.
Angara also emphasized that the bill provides for several earmarking of proceeds to ensure that the revenues benefit the people.
Under the Senate version, the first P150,000 annual taxable income will be exempted, while retaining the P82,000 tax exemption for 13th month pay and other bonuses, and the maximum P100,000 additional exemption for up to four dependents.
Angara said this translates to an approximate tax-exempt monthly income of P25,000 for workers with four dependents — in line with President Duterte’s campaign promise to exempt workers earning P25,000 and below from income tax.
From the current two million tax-exempt minimum wage earners, the proposed new tax scheme will triple the exempted income taxpayers to around six million, according to the senator.
For self-employed and professionals, doctors, lawyers and accountants, the bill introduces a flat eight-percent tax on gross sales for easier compliance.
So-called marginal income earners like sari-sari store owners or fishball vendors who have gross sales not exceeding P100,000 will be tax-exempt.
The Senate’s TRAIN bill, however, also imposes higher taxes on certain products and services – foreign currency deposits, capital gains tax on stocks not traded in the stock exchange, and dividends – but Angara said they are “highly progressive.”
Including these taxes in the package allows the Senate to mitigate the detrimental effects on the poor from the taxes proposed by the Department of Finance and the House, the senator said.
AmCham backs TRAIN
Meanwhile, Malacañang yesterday welcomed the American Chamber of Commerce of the Philippines (AmCham)’s support for the tax reform bill, which has been certified as urgent by Duterte.
“We are pleased with the expression of support of the (AmCham) on the Comprehensive Tax Reform Program. AmCham has added a strong voice for the passage of the (TRAIN), which is now set for plenary deliberations (at) the Senate,” presidential spokesman Ernesto Abella said in a statement.
“The poor and the vulnerable, as the President’s economic team explains, are at the heart of our tax reform,” he added.
With better infrastructure and social services, the government will improve productivity and living standards of Filipinos, according to Abella.
– With Alexis Romero