By Camille A. Aguinaldo, Reporter
SENATOR Joseph Victor G. Ejercito on Sunday warned the second package of the tax reform program will be derailed in the Senate if it would cause “hardships” to Filipinos.
In a text message to reporters, he said, “I will not even think about considering the TRAIN 2 (Tax Reform Acceleration and Inclusion 2) package unless I get clear guarantees from our economic managers that this measure will not result (in) more hardships for the Filipino people. This means that government economists need to provide us with accurate and well-studied data and, more importantly, exhibit complete transparency and honesty.”
“TRAIN 2 will derail if they feed us with the wrong information and engage in deception as they did when we were discussing TRAIN 1,” Mr. Ejercito also said.
Senators during a legislative inquiry on the inflationary effects TRAIN 1 last May took to task the government’s economic cluster for not delivering on its earlier assurances to the Senate while the law was still being deliberated upon in Congress.
Officials from the economic departments told senators last year that TRAIN 1 would not contribute greatly in inflation and social mitigating measures were in place for the poorest Filipino families.
The Department of Finance (DoF) repeatedly assured that the TRAIN law had minimal effect on inflation, which hit 5.2% this June. Meanwhile, social mitigating measures have yet to be fully implemented by the government.
Senate Majority Leader Juan Miguel F. Zubiri earlier said senators were nervous of TRAIN 2 because of the inflationary effects of TRAIN 1. He added that no one in the Senate wanted to sponsor the bill.
The first package — Republic Act No. 10963 which took effect last Jan. 1 — slashed personal income tax rates but increased or added levies on a host of items and removed several value-added tax exemptions.
The second package of the tax reform program 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. It was filed in the House of Representatives last March.
According to the Constitution, tax measures should emanate from the House of Representatives. While TRAIN 2 is still being tackled in the House, separate bills have been filed in the Senate concerning the lowering of corporate income tax and the rationalization of incentives.
Mr. Ejercito said he would push instead for taxes on tobacco so its revenues may fund the proposed universal healthcare which remained pending in Congress.
“It will now be a revenue as well as a health measure,” he said.
He also added that the government should also improve efficiency in tax collection as ma eans to plug revenue loopholes.
“I would rather that we make tax collection more efficient. Raising taxes is the lazy way to raise revenues,” Mr. Ejercito said.