Senators tell gov’t; Go slow on ‘TRAIN 2’

Published July 24, 2018, 3:46 PM

by Patrick Garcia


By Vanne Elaine Terrazola

Some senators are lukewarm over the passage of the second package of President Duterte’s tax reform program.

President Duterte, in his third State of the Nation Address (SONA) Monday, asked the Senate to come up with a counterpart bill on the Package 2 of his five-tranche comprehensive tax reform program.

Senate of the Philippines / Manila Bulletin
Senate of the Philippines / Manila Bulletin

Stressing its urgency, Duterte appealed to the Upper Chamber not to ignore the measure which he aimed to sign before the end of the year.

Senator Grace Poe, however, said she believes that the proposal should be studied carefully as she raised concern that this may trigger further inflation, following the enactment of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.

“Gusto niyang ipasa ‘yong second TRAIN law, but pag-aralang mabuti kasi kahit papaano, nakakadagdag nga ito sa taas ng presyo ng bilihin (He wants the second TRAIN law passed, but this should be studied carefully, since this too contributes to the increase in the prices of goods),” Poe told reporters in an interview after the SONA.

“Dapat ito ay magbibigay sa diskuwento sa taxes ng korporasyon. Maaaring makatulong iyon para magkaroon ng investments pero saan tayo babawi ng sources of revenue? So baka mamaya mayroong mga ibang hidden taxes na hindi natin alam na pampabigat rin sa taumbayan (This would provide discounts on the taxes of corporations. While this may help in increasing investments in the country, what would be our other sources of revenue? So there might be hidden taxes that might burden our countrymen),” she added.

Poe urged her colleagues in Congress to review the proposed “TRAIN 2” before approving it.

“Responsibilidad namin na suriing mabuti ito. Tulungan ang Presidente sa mga bagay na sa tingin namin ay makakabuti sa ating mga kababayan (It’s our responsibility to study this carefully. We should help the President on matters that we think would benefit our people),” she said.

Sen. Cynthia Villar shared Poe’s sentiment. Whether or not she would support President Duterte’s TRAIN 2 would depend on its contents.

“Depende kung anong laman. I’m not familiar with the contents of the Package 2. Alam ko ibaba ang corporate tax pero anong kapalit? Magbabawas ng incentives? Depende kung anong industry ang babawasan ng incentive (It depends on the content. I’m not familiar with the contents of the Package 2. I know it will lower corparate tax but what to do we in return? Will we reduce incentives? It will depend on which industry whose incentive will be reduced),” Villar said when asked about her opinion.

Senator Riza Hontiveros also urged the Duterte government to slow down on its tax reform program as she reiterated her appeal to have implementation of TRAIN reconsidered.

“Medyo magpreno-preno muna sila, magmenor sa paglatag ng TRAIN 2 dahil there may be even reasons na i-suspend muna ‘yong second round of excise tax increases sa ilalim ng TRAIN 1 (I think they should hit the brakes for now, slow down. There may be even reasons to suspend the second round of excise tax increases under TRAIN 1),” Hontiveros said.

Hontiveros, likewise, appealed for the reduction of the value-added tax (VAT) rate. She had filed a bill seeking to lower the VAT rate from 12 percent to 10 percent.

In an interview following a caucus of senators Tuesday, Senate President Vicente Sotto III said they are looking at the pending bills instead of prioritizing TRAIN 2.
“Meron kaming mga bills na pinag-uusapan na makakatulong imbes na directly ‘yong TRAIN 2 agad ang pag-usapan. May mga bills kami na nakapending na maa-achieve din ang gusto sa TRAIN 2 na hindi magiging ika nga e offensive as far as the taxes and inflation are concerned (We have discussed bills that we believe would help rather than directly tackling TRAIN 2. We have pending bills that may achieve the goals of TRAIN 2 that would not be offensive as far as taxes and inflation are concerned),” Sotto said.

Sen. Joel Villanueva, meanwhile, said that he agrees with the reforms in corporate income tax and investment incentives as this would “make the country more competitive.”

But Villanueva said such a proposal requires “a clear framework in identifying industries that will be incentivized for generating quality jobs and for contributing significant growth to our economy.”

Sen. Sherwin Gatchalian, for his part, vowed to advocate for the passage of the economic legislation that will “stimulate inclusive economic growth that will be felt by all Filipinos especially our poor countrymen who are struggling to cope with rising inflation.”

The second package of the comprehensive tax reform proposal, or TRAIN 2, Duterte said, would lower corporate income taxes including those for micro, small or medium enterprises (MSMEs). He said lower taxes would mean that businesses would have more money toinvest with and this create more jobs.

Duterte said he eyes to submit all five packages of his tax reform program to Congress by end of July.