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By Raynan F. Javil

House targets approval of first tax reform package next month

Posted on April 05, 2017

THE FIRST PACKAGE of the government’s tax reform program could bag committee and plenary approval in the House of Representatives next month, according to the head of the chamber’s Ways and Means committee, even as the Department of Finance (DoF) had hoped to get the Senate’s green light as well by June.

The administration wants to shift the tax burden away from low wage earners to those who can afford it. -- BW FILE PHOTO
“Obviously, we can work naman during the break, so -- I don’t know how realistic -- pero puwede naman mag-TWG (the technical working group can work) during the break and then puwedeng ma-approve sa committee when we resume and then mag-plenary na rin,” Quirino Rep. Dakila Carlo E. Cua, the committee’s chairman, said by phone yesterday after saying a morning interview over radio station dzMM that he expected plenary approval sometime “in May.”

The House, which will resume session on May 2 after a break of more than six weeks, adjourns next on June 4.

“So it’s possible before the next break ay maaksyunan na ng (that the tax reform bill be acted on in) plenary (session),” Mr. Cua said.

Asked to clarify if the “action” he’s referring to is the third and final reading approval before adjournment, Mr. Cua replied: “Yes, that’s always been the target and we will still attempt to accomplish that.”

House Bill No. 4774, filed by Mr. Cua, failed to gain committee approval before Congress went on a break last March 15.

Instead, the committee formed a technical working group (TWG) that will harmonize the DoF-drafted measure with other versions that did not come from the administration.

In its configuration as of Jan. 30, the first package was to result in P139.6 billion in foregone revenues from lower personal income tax, estate tax and donor tax rates as well as raise an additional P302.1 billion from reduced value added tax exemptions, as well as increased excise taxes on cars and oil products, yielding P162.5 billion in net revenues in the first year of implementation.

Mr. Cua said he could not say how much HB 4774 could change after the TWG consolidates it with the other bills. “Mahirap eh, kasi ‘yung (It would be difficult to say because the) TWG is a separate group, that is why ang hirap ma-anticipate talaga,” Mr. Cua said, adding that the TWG has not even convened yet.

But while he insisted that the final configuration that will come out of the House will be “really hard to predict,” Mr. Cua said: “Siyempre, more revenues mean more programs for the government so gusto ng government ‘yun, pero dapat ma-balance ‘yung objective ng bill (the government wants that but that should be balanced with the bill’s objective of progressive taxation).”

The Finance department said that the additional revenue generated from the first tax package will be used to fund infrastructure buildup under the administration of President Rodrigo R. Duterte.

Ang guiding principle ko is that as long as the bill is adjusted correctly and the intent of the bill is not to tax the poor so much but really to tax more those who can afford... So if in the end mababago siya (the configuration changes), as long as it is along those lines, then we’re open,” Mr. Cua said.

He said committee members have been “trying our best to come out the best version of the bill,” even as the bill has remained largely unchanged for now.

Sa ngayon ‘di pa naman nagalaw eh, wala pang motions sa mother committee (For now, nothing has changed as there has been no motion from the mother committee to do so),” Mr. Cua said.