Tax relief scheme questioned in student fare discount bills

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THE House Committee on Transportation’s Monday discussions on student fare discounts continued with resource persons calling the tax relief scheme for transport operators unworkable.

The technical working group, led by Committee chair Cesar V. Sarmiento of Catanduanes, tackled nine bills, proposing a 15 to 20% discount to students on regular fares on all modes of transportation.

“We have to thresh out the issues, in order for us to come up with a substituted and consolidated bill that will embody all the concerns we wish to address,” Mr. Sarmiento said in his opening statement.

He noted that the committee plans to approve the Substitute Bill on Wednesday. Its counterpart version, Senate Bill 1597, has been approved on third reading.

Among the contentious provisions discussed by the panel was the grant of a tax deduction to transportation utilities.

“We were informed that in the Committee Report, there was a particular provision pertaining to tax deductions, but when it was approved in the Senate, this particular provision was taken out,” he said.

House Bills 8318, 7269, and 8397 all provide for tax relief claimable by transportation utilities against the discounts granted, which the Department of Finance (DoF) proposed to have removed.

Doubts were raised over “the administrative feasibility of these tax deductions” by a Finance Department official, Director Juvy C. Danofrata. “Before you can claim any tax deduction or credit to the BIR (Bureau of Internal Revenue), you must be able to present evidence or proof that it’s really the students who were granted discounts.”

She noted that presenting proof, such as the issuance of an official receipt (OR), would be particularly difficult for jeepney drivers.

Ms. Danofrata also noted that government is expected to forego up to P2.4 billion in taxes from jeepneys fare discounts alone.

“Our range of assumptions puts the revenue loss at between P0.5 billion and P2.4 billion from jeepney fares,” Ms. Danofrata said.

Land Transportation Franchising and Regulatory Board (LTFRB) member and lawyer Aileen Lourdes A. Lizada proposed that the tax deduction be applied to public utility vehicles capable of issuing official receipts while others may be granted separate forms of assistance. — Charmaine A. Tadalan