Tax reform legislation fails to hurdle House panel

Posted on March 15, 2017

THE TAX REFORM failed to gain committee level approval at the House Ways and Means committee hearing yesterday, but a technical working group (TWG) will be convened during the Congress session break to discuss final concerns, specifically the removal of exemptions on cooperatives.

House of Representatives Plenary Hall. -- BW FILE PHOTO
After seven sessions of committee deliberation on House Bill 4774, or the Tax Reform for Acceleration and Inclusion Act (TRAIN), there were still calls for amending figures and exemptions from the original proposal.

House Ways and Means committee Chairman Rep. Dakila Carlo E. Cua said that a TWG will meet during the break to discuss remaining concerns, before submitting a consolidated version of various proposals to the committee for approval.

Mr. Cua however has not provided a date as to when the TWG will convene.

Finance Undersecretary Karl Kendrick T. Chua -- who is part of the TWG, said the group’s formation “is a very good sign, it means that the positions have been heard and then we have to make a decision so it’s a good sign.”

Mr. Chua said that the Department of Finance will still push for its target implementation date in July, despite the bill remaining with the House.

In the hearing yesterday, a representative from the Philippine Cooperative Center raised reservations over the P3 million value-added tax (VAT) threshold of exemptions on gross sales.

“We are taxing those people who are naturally exempted because of poor earnings. Tax reform is positive, but the cooperative sector will die. Currently, they are fully exempted yet only a little more than one half survives. More so, if they are not exempted, they will not survive,” the Philippine Cooperatives Center said in a statement.

Mr. Chua said that he is not against supporting the cooperative sector, but they will find ways to get the best deals for all stakeholders, aside from increasing the VAT threshold.

Asked when how much the government is willing to forego in allowing exemptions for cooperatives, Mr. Cua said: “The Secretary’s policy is clear. The tax reform will fund the infra[structure] program. Without the tax reform we don’t have the infra program. He made it clear in previous statements.” -- Elijah Joseph C. Tubayan