Plenary deliberations up on CTRP; 102 solons are co-authors, but Lagman sounds caution | News5

     8 months ago
54
Leave a Comment
0 SHARE

MANILA – The House of Representatives is set to start plenary deliberations on the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP) that has been co-authored so far by 102 legislators representing various congressional districts and partylist sectors.

House Bill No. 5636, the substitute bill of the Tax Reform for Acceleration and Inclusion Act (TRAIN), was reported for first reading last May 15 and referred to the House Committee on Rules for calendaring of its plenary deliberations this week.

This substitute bill hews closely to the version endorsed by the Department of Finance (DOF)–House Bill No. 4774–and contains “moderate modifications,” according to Finance Undersecretary Karl Kendrick Chua.

“With strong support from President Duterte and the high officials of the land, with more than 100 co-authors, the support of the more than 100 stakeholder groups, and millions of workers waiting for the reform, this is the time to move decisively,” Chua said.

Chua said the DOF aims to persuade lawmakers to restore the original features of the DOF-endorsed bill – HB 4774 – in the substitute bill before it undergoes plenary deliberations. The rationale for this: to ensure that the final approved version of the House will keep the budget deficit in check and raise enough revenue to help fund the planned massive spending on infrastructure, human capital formation and social protection.

Chua expressed hope the House would be able to approve the measure before the Congress goes on its sine die adjournment this June.

Last Friday, Budget Secretary Benjamin Diokno told gthe BusinessWorld Economic Forum he was confident the CTRP would hurdle Congress before such adjournment,”
at least in the House of Representatives.”

Caution preached

Meanwhile, opposition leader Rep. Edcel C. Lagman cautioned the leadership of the House supermajority against moving with undue haste on House Bill No. 5636 (“Tax Reform for Acceleration and Inclusion”) without clear and enabling provisions mitigating the adverse impact of new revenues on the vulnerable sectors.

While the low-income earners will not benefit from the reduction of the income tax rate because they are already tax-exempt, they will suffer the cascading effects of the increased excise tax on petroleum products as the prices of basic goods and services will become more expensive, including transport and mass housing, Lagman said in a statement Sunday.

The projected cash vouchers for the poor must be well-defined and qualified to benefit the truly marginalized, he added.

The provision on cash vouchers must be specifically provided in the bill and must be implemented through the annual General Appropriations Acts (GAAs).

There must be a definitive expenditure link, added Lagman, between revenues generated and specific percentage earmarking for infrastructure (particularly public transportation), education, health and social protection.

A general attribution of revenues to expenditure is not sufficient, he warned.

Lagman also sought a clear provision that the repeal of VAT exemptions does not include benefits for senior citizens and persons with disability.

HB 5636: key features

Of the 102 legislators who have expressed their support for HB 5636 by co-authoring the substitute bill, 87 are district representatives while 15 are partylist congresspersons. Twenty-five of the co-authors are members of the ways and means committee, which gave its final approval to this substitute bill last May 15 that later on led to its first reading in that same day’s plenary session.

HB 5636 aims to lower personal income taxes for compensation earners along with expanding the tax base by limiting VAT exemptions to raw food, education and health and those enjoyed by seniors and persons with disabilities, adjusting the excise tax rates for fuel and automobiles and taxing sugar sweetened beverages, among other measures.

The original version—HB 4774 filed by Quirino Rep. Dakila Carlo Cua—does not include the sugar tax, but provides for the DOF-proposed indexation of fuel excise taxes to inflation after a three-year period, which was removed in HB 5636.

HB 5636 also provides for a five-bracket tax scheme for automobiles, as against the DOF-endorsed four-tiered structure and will be implemented on a two-year staggered basis starting 2018 instead of the original proposal of starting the full implementation in the first year.

Chua said these modified provisions in the original bill are among the features that he hopes would be restored in the final approved version of the House.

Finance Secretary Carlos Dominguez III said the approval of the CTRP’s first package is crucial to the financial viability of the Duterte administration’s higher public spending policy because it aims to correct the tax system’s “inherent flaws, such as non-indexation to inflation of rates and large scope of exemptions and special treatments that complicates tax administration.”

“This is the tax package that will enable us to reshape our economic growth to make it more inclusive. It is the tax reform package that will bring us to the irreversible path towards being a high-income economy in one generation and bring down our poverty rate to a mere 14 percent by 2022,” Dominguez said.

He noted that, “If we fail to raise the volume of revenues required for our economy to break out over the next few years, we will fail in everything else. We will fail to close the infra gap. We will fail to make the investments in our young to prepare them for meaningful economic participation.”

“We will fail to catch up with our neighbors in the region who have invested twice of the amount than what we did on infra over the past three decades. Most important, we will fail to bring down the level of poverty afflicting our people,” he added.

The substitute bill due for plenary discussions had consolidated HB 4774 with 54 other tax reform proposals and was provisionally approved by the ways and means committee by a vote of 17-4 last May 3. It was thereafter referred to the House appropriations committee chaired by Rep. Karlo Alexei Nograles for the earmarking of the funding provisions.

After the appropriations committee returned the bill, now numbered as House Bill 5636, the ways and means panel gave its final approval to it on May 15.

Rep. Isagani Amatong, one of the co-authors of HB 5636, said he was supporting the tax reform measure because “there is an urgent need to comprehensively review the tax system of the country” and make it “more progressive.”

“Percentage-wise, those who earn should pay more; and those who earn less should pay less. This scheme addresses the issues of: social equity, and inclusive economic growth that should be considered in charting and broad outline of the socio-economic development of the country without losing track of the end-goal of optimizing revenues for the government,” Amatong said.

Rep. Maximo Rodriguez, for his part, quoted the late president Ramon Magsaysay in expressing his support for the bill: “The general welfare to all is the only justification for the exercise of governmental power and authority.”

Rep. Joey Salceda, the senior vice chairman of the House ways and means committee, said “among the benefits the bill aims to deliver is the transfer of some P170 billion annually from the country’s rich to the middle class and low income households, representing the single largest direct transfer of wealth in personal income taxes.”

He said the measure is seen to “ultimately reduce poverty to single digit, grow the economy by 9 percent, and transform the Philippines into an Asian economic powerhouse by 2028, with a $1.2 trillion Gross Domestic Product.”

Source link

0 SHARE

Post Comments