Rody signs budget, TRAIN tomorrow

Alexis Romero - The Philippine Star

MANILA, Philippines — President Duterte will sign into law the 2018 national budget and the tax reform measure tomorrow, Malacañang confirmed over the weekend.

Presidential Communications Operations Office Secretary Martin Andanar yesterday said the ceremonial signing of the budget and the tax reform measure would be held at 2 p.m. in Malacañang Palace. 

The P3.7-trillion budget for next year was ratified by Senate and the House of Representatives last week. 

As required by the 1987 Constitution, the education department will get the lion’s share of the budget with P553.3 billion.

Agencies with the highest allocations include Department of the Interior and Local Government (P170.8 billion), Department of National Defense (P149.7 billion) and Department of Social Welfare and Development (P141.8 billion).

The outlay also provided funds for the free tuition program for state-run universities and colleges. 

The tax reform package or the Tax Reform for Acceleration and Inclusion (TRAIN) bill, meanwhile, aims to generate additional revenues to fund the government’s ambitious infrastructure program. 

The rarified bill exempts those earning an annual taxable income of P250,000 and below from paying the personal income tax and raised the tax exemption for 13th month pay and other bonuses to P90,000. 

It also adjusts the excise taxes on fuel and automobiles, broadens the value-added tax base, and implements a mandatory fuel marking and monitoring program. 

The tax reform is expected to generate P130 billion in additional revenues.

A powerful tobacco lobby is responsible for the last-minute insertion of what is seen as “low” excise taxes on the industry in the TRAIN, Sen. Joseph Victor Ejercito said yesterday.

Ejercito chairs the Senate committee on health and author of Senate Bill 1605, which seeks to increase the tax on tobacco to P90 per pack in 2018 and will increase nine percent every year thereafter.

The Senate and the House of Representatives ratified the TRAIN bill last week, which included an increase in excise taxes on tobacco products from the current P30 per pack to P32.50 to be imposed in 2018.

The Department of Finance has proposed a much higher increase in excise taxes for “sin products” like tobacco for Package 2 of the TRAIN that the Department of Finance (DOF) will submit to Congress for approval early next year.

Ejercito said he strongly believes the tobacco lobby, led by tycoon Lucio Tan, caused the insertion of the much lower excise tax rate in Package 1 of the TRAIN so that the much higher proposals in the Senate, and in the DOF, will no longer be included in the second tranche of the tax reform measure.

“I’m really disappointed. We, the other senators, did not see this insertion coming. Maybe Lucio Tan and Philip Morris had a hand in this. His influence (on lawmakers) is clearly seen here,” Ejercito said, referring to the company that has merged with the businessman’s Fortune Tobacco Co.

“For so many years, (Tan) has been duping the government and he gets away with it every time. Now, I clearly see his interference here,” he said.

He noted that Tan has previously faced multibillion-peso tax cases, and was recently forced to pay the government P6 billion in unpaid air navigational charges of Philippine Airlines, which he owns.

The senator said unlike the taxes on sweetened beverages and petroleum, tobacco tax is not inflationary, and will not only save government costs on health care, but also save lives.

                              – With Paolo Romero

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