Palace tells lawmakers seeking re-election: Don't fear TRAIN 2

MANILA, Philippines — Lawmakers seeking reelection do not have to be afraid of the second package of the Tax Reform for Acceleration and Inclusion because it will not impose new taxes, Malacañang said on Monday.

Presidential spokesman Harry Roque admitted that some lawmakers might be afraid to back the measure because they did not want to be associated with a tax law during elections.  

"It’s an election year. So those who are running, especially those seeking reelection, are afraid of passing another tax bill," Roque said in a press briefing.

"But I will repeat: This tax bill is different because it does not impose new taxes. It will lower the corporate tax so we won't have the highest corporate tax in Asia. TRAIN 2 is different so there is no need to be afraid," he added.

READ: No senator wants to sponsor TRAIN 2

Roque said there was a need to explain to the public that TRAIN 2 would not have an effect on them.

"It’s correcting their misconception that we are levying new taxes. We are not, we are making it easier for corporations to operate. We are reducing tax burden on corporate tax filers," he added.

TRAIN 2 seeks to cut corporate income tax to 25 percent from 30 percent. Finance officials said the measure would benefit more than 95 percent of businesses in the country that were paying the highest corporate income tax rate in the region.

TRAIN 2 also contains aims to provide new incentives for current players that expand their businesses or adopt new technology and to rationalize incentives given to investors.

READ: Still hope for TRAIN 2 approval this year — Sotto

Senate Majority Leader Juan Miguel Zubiri has admitted that none of the senators are willing to sponsor TRAIN 2 because lawmakers are still "traumatized" by the effects of the first TRAIN package.

TRAIN 1 exempted those earning an annual taxable income of P250,000 and below from paying the personal income tax and hiked the tax exemption for 13th-month pay and other bonuses to P90,000. But it also imposed new taxes on diesel, liquefied petroleum gas, kerosene and bunker fuel for electricity generation and higher taxes on other oil products.

Critics have blamed TRAIN 1 for the higher prices of commodities but officials deny this, saying the price movements were caused by a weak peso and rising oil prices in the world market.

READ: Roque: TRAIN 2 will reduce corporate taxes

— Alexis Romero