Senate aims to pass tax reform before adjournment in October

By Mario M. Banzon

WITH ONLY two weeks left before Congress adjourns on Oct. 13, the Senate continues this week its daily plenary debate on Senate Bill (SB) 1592 or the Tax Reform Acceleration and Inclusion (TRAIN) Bill being proposed as the Senate’s version of the tax-reform package.

According to Senate President Aquilino Martin L. Pimentel III, the Senate plans to pass the bill on second and third reading before the October recess until Nov. 12.

“That is exactly the deadline. Pass the TRAIN bill before going on break. Bicam can be held during the break,” Mr. Pimentel said on Sunday, Oct. 1, when sought for comment. “It’s possible,” Senator Juan Edgardo M. Angara who was also sought for comment said in a text message on Saturday. “But it is in the hands of the members of the Senate who may wish to interpellate or debate further on the bill,” he added.

Also sought for comment, Finance Undersecretary Karl Kendrick T. Chua in a text message confirmed that the Department of Finance (DoF) will submit on Monday its estimated revenues from the tax-reform bill being debated in the Senate. At this point, Mr. Chua declined to give further details.

During the debates, which began on Sept. 25, Senate Majority Leader Vicente C. Sotto III noted that he “heard” the bill being proposed as the Senate version would only yield P55 billion. In response, Mr. Angara said that figure has yet to include the breakdown of revenues to be collected from the lifting of Value Added-Tax (VAT) exemptions.

Under the House version, the lifting of VAT exemptions alone would already generate P81 billion in revenues. Based on DoF’s initial computation of the proposed Senate version, SB No. 1592 is estimated to generate P55 billion without the expected revenues from the lifting of VAT exemptions.

The Senate ways and means committee, which Mr. Angara heads, is looking at a similar revenue impact as with the House version.

The House version is estimated to generate revenues of P133.8 billion worth while the original DoF version had an estimate of P157.2 billion. Mr. Angara is looking at P134 billion from the bill he presented to the Senate.

“The House version is quite robust. It is close to what the administration wants. The Senate is still debating the pros and cons but we believe it will pass a bill that will yield the revenues we are expecting,” Finance Secretary Carlos G. Dominguez III said in a statement over the weekend.

In addition, Mr. Dominguez said he is “confident” the first package of the administration’s Comprehensive Tax Reform Program (CTRP) would be approved by Congress before December this year.

The issues that were tackled last week during the plenary debates were the excise tax on petroleum products and on automobiles, and the lifting of VAT exemptions on government-owned and -controlled corporation. Also discussed was the possible earmarking of tax revenues to specific programs such as Senator Grace Poe’s First 1,000 Days.

“What we can do is ensure our presence to answer questions from our colleagues which is what has been happening the past week,” Mr. Angara said when asked about the specific hurdles the proposed Senate version may face during the deliberations.

Senators Franklin M. Drilon, Panfilo M. Lacson, Sherwin T. Gatchalian, and Paolo Benigno A. Aquino IV are scheduled to interpellate Mr. Angara in Monday’s plenary.

Meanwhile, Presidential Spokesperson Ernesto C. Abella in a statement on Sunday noted support by the American Chamber of Commerce of the Philippines (AmCham) for CTRP.

“AmCham has added a strong voice for the passage of the Tax Reform for Acceleration and Inclusion Act (TRAIN), which is now set for plenary deliberations in the Senate,” Mr. Abella said, adding:

“The new tax measures are expected to raise P133.8 billion in 2018 to fund the Administration’s infrastructure and anti-poverty programs.

“The DoF plans to implement the proposed tax reform program, a priority measure by President Rodrigo R. Duterte, by Jan. 1, 2018 to fund the administration’s infrastructure programs.”