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New tax reform package seen passed in Q1

By: - Reporter / @bendeveraINQ
/ 05:26 AM January 13, 2018

The Department of Finance has expressed confidence that package 1B of the comprehensive tax reform program, which includes the planned general tax amnesty, could be fast-tracked by Congress and be approved in the first quarter.

“The Senate said that next week when they resume they will prepare the committee report, and that committee report will be four in one: Estate tax amnesty, general amnesty, bank secrecy relaxation and the automatic exchange of information. So once they file the committee report, the Senate will tackle it in the plenary and then [they will convene the] bicameral [committee on tax reform],” Finance Undersecretary Karl Kendrick T. Chua said.

Congress will resume session on Jan. 15 after its Christmas break.

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The so-called package 1B was a result of the Senate’s removal of the tax administration measures from the original first tax reform package passed by the Lower House under House Bill No. 5636.

Chua said another bill on the proposal to raise the motor vehicle user’s charge, already available in the House of Representatives as well as the Senate, would be elevated to the bicameral committee.

Once package 1B is passed, it will add another P38.9 billion in revenues this year, bringing the total net revenue of the first tax reform package as a whole to P128.8 billion.

Last Dec. 19, President Duterte signed into law package 1A of the Tax Reform for Acceleration and Inclusion (TRAIN) Act under Republic Act No. 10963, which beginning Jan. 1 this year slashed and restructured personal income tax rates that had stayed the same for two decades, while also jacking up or slapping new taxes on the consumption of oil, cigarettes, sugary drinks and vehicles.

Taking into account the five items vetoed by the President from RA 10963, package 1A is expected to raise P89.9 billion in net revenues this year—P63.3 billion from tax policy measures on top of P26.6 billion from legislated tax administration measures.

This year, the government stands to lose P146.6 billion in foregone revenues from the lower personal income tax rates as well as donors’ and estate taxes, which will be offset by higher taxes on various goods to be shouldered by consumers.

In 2019, packages 1A and 1B will result in a revenue gain of P175.1 billion; P221.7 billion in 2020; P224.3 billion in 2021, and P219.2 billion in 2022.

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TAGS: comprehensive tax reform program, Department of Finance, tax amnesty
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