AT the start of 2018, the Tax Reform for Acceleration and Inclusion Act (TRAIN) is expected to take affect if Congress submits its final reconciled version of the bill to Malacañang within the week, said Finance Secretary Carlos Dominguez III.
“President Duterte could sign it into law before the Christmas holidays, in time for its publication before the end of the year and its effectivity by Jan. 1,” said DOF in a statement issued yesterday.
Last Dec. 1, the bicameral conference committee, tasked to reconcile the conflicting versions of the House and Senate versions of the TRAIN, began its meeting and is expected to wrap up its final report within the month.
The Senate ways and means committee began the deliberations on the TRAIN, which was filed in the chamber by Senate President Aquilino Pimentel III as Senate Bill (SB) No. 1408 last March 22.
The Senate began conducting plenary debates on the revised measure, SB 1592, on Nov. 22 and finally approved it with substantial amendments last Nov. 28.
Meanwhile, House Bill (HB) No. 5636, is the TRAIN version approved by the House of Representatives last May 31.
TRAIN’s first package includes the lowering of personal income tax rates, increasing the take home pay of employees. However, it also called for widening the base for value-added tax and increasing excise tax rates for fuel and automobiles, among other reform measures.
For instance, the Senate-approved SB 1592 states that the first P250,000 annual taxable income will be exempted from tax, plus the P82,000 tax exemption for 13th month pay and other bonuses. This translates into an approximate tax-free monthly income of P21,000.
According to the National Economic and Development Authority (NEDA), the TRAIN is expected to create about half a million jobs over the next five years and could lift up to 250,000 Filipinos out of poverty over the same period.
In a DOF-released statement, NEDA National Policy and Planning Staff Director Reynaldo Cancio said NEDA’s analysis shows that the bulk of the jobs to be created by tax reform will come from the construction and retail sectors.
The Cebu Chamber of Commerce and Industry (CCCI) also called for the speedy implementation of the Duterte administration’s tax reform program.
“Undeniably though, our country has one of the highest income tax rates in the ASEAN region. In order for us to be able to compete in the global arena, we hope the tax reform program will soon be adapted to help address the high cost of doing business and contribute to our global competitiveness,” said CCCI president Melanie Ng.
“We eagerly anticipate the current administration’s plan under President Rodrigo Duterte to overhaul our tax system,” Ng added.