BEATING the deadline, the House of Representatives has ratified the first tax measure of the Duterte administration on the last session day for the year 2017.
On Wednesday night, the Bicameral Conference committee submitted to the Senate and House of Representatives the Tax Reform for Acceleration and Inclusion (TRAIN) bill for ratification.
It is expected to be signed into law by President Rodrigo Duterte before the year ends.
The TRAIN bill specifically reduces the income tax rate of individual income earners, giving them higher take-home pay.
It likewise exempts the first P250,000 annual taxable income and raised the tax exemption for the 13th month pay and other bonuses from P82,000 to P90,000.
However, the bill imposes higher taxes on fuel and fuel products, on brand new automobiles, tobacco products and sugar-sweetened beverages.
As for coal, Deputy Speaker Romero Federico Quimbo, one of the members of the House contingent in the bicameral panel, said the excise tax will be significantly hiked.
“Coal will not be exempt. It will be subjected to a new excise tax that is 500 percent higher than before the TRAIN,” Quimbo said.
Under the TRAIN proposal, coal manufacturers, both local and foreign, will pay the excise tax of P50 per metric ton in the first year of implementation; P100 in the second year; and, P150 in the third and succeeding years.
In a separate interview, Quirino Rep. Dax Cua, chairman of the House committee on ways and means, said the imposition of VAT and other taxes on coal manufacturers would be taken up in the package 2 of TRAIN.
He also said that the final version was a product of thorough discussions between the panels.
Other salient features are:
* Marginal income earners, such as farmers and fisherfolk, sari-sari store and carinderia owners, market vendors, and tricycle drivers will also be exempt from paying taxes just like minimum wage earners;
* Reduced and simplified estate tax to a flat tax rate of six percent based on the net value of the estate. There is also an increased allowable bank withdrawal to help heirs settle expenses relating to the passing of decedent.
* The donor’s tax will also be reduced to a flat tax rate of six percent on net donations for gifts exceeding P250,000 regardless of relationship between donor and donee;
* The bill will also impose an excise tax on sweetened beverages except on milk, coffee, and natural fruit and vegetable juices;
* Beverages using caloric and non-caloric sweeteners will be taxed P6 per liter while beverages using high fructose corn syrup will be taxed P12 per liter;
* The sale of drugs and medicines prescribed for diabetes, high cholesterol, and hypertension will be VAT-free starting 2019.
* Socialized housing worth P450,000 and below and low-cost housing amounting to P3 million will continue to enjoy VAT exemption for the next three years.
* Electric vehicles will be exempted from tax. Hybrid cars, on the other hand, will be taxed at half the rates;
* A five percent tax will also be imposed on invasive cosmetic procedures, surgeries, and body enhancements aimed at improving, altering, or enhancing the patient’s appearance.
Only 20 lawmakers were present Wednesday when the House of Representatives was deliberating on a very important measure – the tax bill, said two militant solons who claimed the House leadership railroaded the TRAIN bill.
ACT Teachers party-list Rep. Antonio Tinio and Bayan Muna Rep. Carlos Isagani Zarate said there was no quorum when the TRAIN bill was ratified in the House.
Tinio objected to the ratification because there was not enough warm bodies for the House to deliberate or exercise legislative functions when the tax reform measure was approved.
The quorum should be half plus one or at least 147.
“The ratification of the TRAIN was a total farce and travesty of so-called representative democracy. With barely 10 people on the floor and despite my very clear objections due to obvious lack of quorum, the presiding officer and majority floor leader proceeded to adopt the final report of the tax reform bill’s bicameral conference committee, copies of which were not even on hand,” Tinio said.
For his part, Zarate assailed the “patent railroading by the lower house of the TRAIN bill despite the clear absence of a quorum and our strong objections on the floor late Wednesday night.”