TRAIN stalled on disagreements over coal tax

MANILA, Philippines — The expected approval of the so-called tax reform bill was delayed last night, apparently by a last-minute disagreement over exempting local coal from the proposed higher levy.

As of 9 p.m., the House of Representatives-Senate conference on the bill officially called Tax Reform for Acceleration and Inclusion (TRAIN) was still deadlocked.

It was not clear if the two chambers could approve the proposed law before they start their month-long Christmas vacation today.

If they failed to pass it, this means that unless President Duterte calls lawmakers to a special session before the end of the year, the administration’s target of having the proposed tax law take effect on Jan. 1, 2018 or in two weeks would not be attained.

The major features of the measure are the imposition of a P6 tax on diesel, kerosene, cooking gas and bunker fuel for electricity over a three year period up to 2020, increase in the levies on other oil products like gasoline and reduction in income tax.

The bill also increases the levy on coal from P10 per metric ton to P50 next year, P100 in 2019 and P150 in 2020. 

The Senate proposed the adjustment, which is not included in the House version of TRAIN.

The original Senate proposal was P300 per metric ton, which was reduced and staggered by the conference committee that reconciled the two chambers’ versions of the bill.

Coal is used by many power plants in the country. There is only one company mining in the Visayas.

Lawmakers sitting in the conference panel could not be reached for comment last night on their disagreement over the proposed coal tax increase.

However, broadcaster Ted Failon of dzMM informed Speaker Pantaleon Alvarez in an interview yesterday morning that the conference committee report being circulated for signature by House and Senate conferees did not reflect their agreement on Tuesday to tax both foreign and locally produced coal.

Failon claimed that the tax exemption the company mining coal in the Visayas has been enjoying since the Marcos regime was inexplicably retained in the report.

Alvarez told the broadcaster that he was not aware of the retention and that he would look into it.

“Honesty, that is questionable because it might amount to class legislation, which the Constitution does not allow. There is the issue of equal application of the law,” he said.

Before the House-Senate conference on TRAIN hit a snag, Finance Secretary Carlos Dominguez III said he was satisfied with the conference committee report on the final version of TRAIN.

He said he was still confident that the incremental revenue target of P130 billion a year could be attained despite changes made by lawmakers in the original proposal of the Department of Finance.