MANILA, Philippines — No one among the senators is willing to sponsor the Department of Finance (DOF)’s second tax package as lawmakers are still “traumatized” by the effects of the Tax Reform for Acceleration and Inclusion (TRAIN) that Congress passed late last year.
Instead, the Senate leadership is thinking of approving pending revenue bills in place of the DOF’s TRAIN 2, which seeks to rationalize investment incentives and reduce corporate income tax.
Senate Majority Leader Juan Miguel Zubiri said during a caucus on Tuesday that Sen. Sonny Angara, chairman of the ways and means committee, had asked his colleagues if anyone of them would want to defend TRAIN 2 in the chamber.
“There were no takers who would want to sponsor TRAIN 2. So we’ll have to wait for the House (of Representatives) to approve it and do the normal course of action, just basically for us to discuss,” Zubiri said.
Zubiri later clarified that while he was personally against TRAIN 2, he was not saying the Senate will not pass the second tax package as it was not for him to decide alone.
He said senators welcome the lowering of the corporate income tax but stressed the need to look into the possible loss of jobs on the plan to remove incentives given to several industries, including business process outsourcing firms and export manufacturers.
Zubiri said he understands why President Duterte was asking Congress to pass the new tax package, especially with the growing government expenditures.
“I believe it is our responsibility as legislators to let the President know what are the possible outcomes of this package. Because he might think this is all a bed of roses. Sometimes messages to the President are filtered by his closest confidants,” he said.
Senate President Vicente Sotto III said the chamber is looking at the passage of the rice tariffication bill and its version of the rationalization of fiscal incentives bill as possible measures to be passed in lieu of TRAIN 2.
The impact
However, Budget Secretary Benjamin Diokno and Education Secretary Leonor Briones warned of the repercussions once the additional packages of the TRAIN law are not passed within the year.
“We are optimistic that all tax packages 2, 3, 4 and 5 will be passed before the year ends. Otherwise, we say goodbye to it. It’s either this year or never because 2019 is an election year,” Diokno said.
“If it is not passed this year, then it will be re-filed under a new Congress in 2019,” he said.
Diokno refused to comment on the reluctance of some lawmakers to spearhead the debates and push for the approval of the remaining tax reform packages, which have been forwarded to Congress.
Diokno noted the concerns raised by Sotto and Zubiri on sponsoring the next tranche of TRAIN measures.
“Well, they are part of the administration, right? It is their responsibility to respond to the demands of the President. The President is very clear, he wants all the tax reform packages,” he said.
According to Diokno, the President will be convening the Legislative-Executive Development Advisory Council (LEDAC) to push for approval of the second tranche of the comprehensive tax reform program.
“The LEDAC is the forum for threshing out the differences between House, Senate and the executive,” he said, hoping the meeting will happen soon enough to address the concerns of lawmakers.
Briones, for her part, cited the need for the administration to pursue its tax reform programs this year to fund the major social services. – With Christina Mendez, Rainier Allan Ronda