The militant Makabayan bloc in the House of Representatives now has an answer to the Tax Reform for Acceleration and Inclusion (TRAIN) Act and Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which they have consistently assailed in the past.
Enter the proposed Tax Reform Act for the Masses and the Middle Class (TRAMM), which Act Teachers Party-list Rep. France Castro is seeking via a still unnumbered bill filed in the 19th Congress.
A statement from Castro Tuesday, July 12, said that the bill aims to address imbalances brought by TRAIN and CREATE "that offer little benefits to poor and middle-class families".
"Rising prices and untamed inflation rates in the past few years all the more justify the need for a tax reform package that would reduce the income tax rates of the overburdened Filipino working class families," the lady solon said.
She added that TRAIN and CREATE were "regressive tax reform laws".
"Reducing income tax rates for working families will not only improve their way of life, but also strengthen their purchasing power which will boost overall domestic demand for consumer goods," Castro said, referring to TRAMM.
"This bill includes setting a 20 percent maximum personal income tax rate for individual citizens, the exemption of the first ₱400,000 of their incomes, bringing back additional exemptions for dependents (this time, senior citizens and persons with disabilities may be claimed as dependents), raising of the cap for tax-free bonuses to ₱150,000, and the mandate for the Bureau of Internal Revenue (BIR) to set up a progressive, 10-bracket (in the minimum) personal income tax schedule," she explained.
According to the militant lawmaker, personal income tax rates for the poor and middle-class citizens in the Philippines are even higher than rates in other countries such as Singapore.
"Other countries also have additional personal allowances and/or tax exemptions for dependents, unlike here in the Philippines," Castro noted.
"With increasing prices of basic goods and services, the passage of this bill is urgently needed. We urge our fellow lawmakers to give high priority to this bill and swiftly enact it into law," she concluded.
Officially designated as Republic Act (RA) No. 10963, the TRAIN Act is the initial package of the Comprehensive Tax Reform Program (CTRP) signed into law by then-President Rodrigo Duterte on December 19, 2017.
It was the law's aim to make make the Philippine tax system simpler, fairer, and more efficient to promote investments, create jobs and reduce poverty.
Then, on March 26, 2021, Duterte signed into law RA No. 11534 or the CREATE Act, which has been described as one of the largest fiscal stimulus for businesses in Philippine history.