THE SECOND PACKAGE of the tax reform program was filed with the House of Representatives on Wednesday, according to the House Majority leader.

“TRAIN 2 has been filed this afternoon (March 21),” Majority Floor Leader Rodolfo C. Fariñas said late Wednesday, referring to the second package of the Tax Reform for Acceleration and Inclusion law.

The House has yet to release an official copy of the bill to the public, as it has not yet been read in the plenary as of Thursday afternoon.

The measure — which was submitted as a proposal by the Department of Finance (DoF) to Congress on Jan. 16 — seeks to gradually cut corporate income tax rates to 25% from 30%, subject to a streamlining of tax holidays granted by 14 investment promotion agencies.

The DoF said that the incentives given out should be “targeted, time-bound, transparent and performance-based.”

The Finance department said that it has inserted the removal of value-added tax (VAT) exemptions of coal and casinos in the second package. The agency expects the bill to be ratified by both chambers of Congress by December.

The bill follows the enactment of TRAIN, or Republic Act No. 10963 — consisting of cuts to personal income, estate and donors taxes, removal of some VAT tax exemptions, an increase in taxes for automobiles, fuel, tobacco, minerals, and a new tax on sugar-sweetened beverages and cosmetic procedures — which was approved by President Rodrigo R. Duterte on Dec. 19.

All tax measures must originate from the House, according to the constitution.

Asked when he aims to have the bill approved by his panel, House ways and means committee chairperson Quirino Representative Dakila Carlo E. Cua said in a text message to BusinessWorld yesterday: “It is difficult to give a definite timeline given that this needs thorough discussion. The committee however, will give this top priority.”

“The objectives of this bill are 1. to lower the corporate income tax and 2. to rationalize fiscal incentives. These two objectives will hopefully contribute to making PH a more attractive investment destination,” he added.

The committee is currently undergoing discussions on Package 1B — a supplemental measure to TRAIN that would raise the first-year incremental revenue to about P130 billion from P82.3 billion currently — which includes the general and estate tax amnesty, relaxation of the bank secrecy law, and raising the motor vehicle users charge.

The DoF is expected to submit to the House up to four more tax proposals within this year for ratification before 2019, which includes more increases to tobacco and alcohol taxes, changes in property taxation and valuation to harmonize national and local rules, restructuring capital income and financial taxes, comprehensive mining tax reform to give the government a bigger share of miners’ revenue, and higher tax rates on luxury goods such as jewelry and yachts. — Elijah Joseph C. Tubayan, Minde Nyl R. dela Cruz

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