TRAIN expected to be signed into law by December

MANILA, Philippines — The Department of Finance (DOF) said yesterday it is expecting the tax reform bill to be signed into law by President Duterte by Dec. 15, allowing the government to implement the tax package measure by next year.

In a statement, Finance Secretary Carlos Dominguez said he is hoping for the Senate to pass the Tax Reform for Acceleration and Inclusion Act (TRAIN) by mid-October, and for the bicameral conference committee to come up with the final version of the bill by November.

“We hope the Senate will pass the TRAIN on third reading before going into recess in mid-October, the bicameral conference to conclude in November, and the President to sign the bill into law by Dec. 15, 2017. This schedule will allow us to implement the tax reform on January 1, 2018, so that the benefits of the reform can be felt at the soonest possible time,” Dominguez said in a statement.

President Duterte has agreed to certify as urgent the tax reform bill.

Last Wednesday, Senate ways and means committee chairman Juan Edgardo Angara endorsed for plenary approval Senate Bill 1592, the senate’s version of the TRAIN.

Dominguez lauded the committee and said the DOF was looking forward to working with the Congress to come up with a final tax reform bill “that will bring the most benefit to the people, while ensuring fiscal responsibility.”

“The DOF welcomes the filing of SB 1592 or the TRAIN. This bill is the culmination of 19 hearings and three technical working group meetings held over the last nine months,” Dominguez said.

The finance chief also welcomed the new amendments introduced by the Senate committee to their own tax reform bill.

“We respect the noble intention of the senators to amend the DOF proposal based on their learned judgment and after due consultation with stakeholders. In the coming weeks, this democratic process continues as the Senate debates the tax reform at the plenary level and as the bicameral conference reconciles the House and Senate versions,” he said.

Under Senate Bill 1592, the first P150,000 annual taxable income and the first P82,000 in 13th month pay and other bonuses will be exempted from taxes.

Taxpayers with up to four dependents will also have an additional P100,000 exemption in their annual taxable income.

The bill also proposes for the indexation or automatic adjustment of income taxes every three years.

It also raises the value-added tax threshold to P3 million from the current P1.9 million, which will benefit small businesses with total annual sales of P3 million and below.

The Senate version also revised the rates for the staggered implementation of the P6 per liter additional excise tax on fuel. Under this version, P1.75 per liter will be added in the first year, P2 for the second and P2.25 for the third.

It also reduced the proposed tax of sugar-sweetened beverages to P5 per liter from the House of Representatives’ version of P10 per liter.

Senate Bill 1592 is expected to give the government P134 billion in additional revenue.