Two of the country’s national organizations of local government executives have separately expressed their full support for the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) on the belief that it will make the tax system more “equitable, progressive and efficient” while raising more funds for infrastructure development and social services outside Metro Manila.
In separate resolutions, the League of Provinces of the Philippines (LPP), which groups together the country’s 81 provincial governors, and the 16,500-strong Philippine Councilors League (PCL) said the TRAIN will help fulfill President Duterte’s 10-point socioeconomic reform agenda and at the same time keep the Philippines fiscally stable.
The TRAIN, the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), was approved by an overwhelming majority of the House of Representatives as House Bill No. 5636 on May 31 and is now under consideration by the Senate.
HB 5636 and Senate Bill 1408, the tax reform bill filed by Senate President Aquilino Pimentel III both aim to significantly lower personal income tax rates by making the first P250,000 in income of compensation earners tax exempt.
Both bills also contain revenue – enhancing provisions such as broadening the value-added tax (VAT) base, and adjusting the excise taxes on fuel and automobiles, among other measures.
The LPP, which has Ilocos Gov. Ryan Luis Singsong for president and Albay Gov. Al Francis Bichara for chairman, said in its resolution that it was “endorsing a more equitable, progressive and efficient tax reform program to accelerate infrastructure development, generate jobs and livelihood, equitably distribute wealth and income among our people, and ensure regional and provincial growth all over the country.”
In Resolution No 2017-006 certified by the LPP secretary general, Bohol Governor Edgar Chatto, the League also said a “reform[ed] tax system will ensure the strengthening of the (country’s) macroeconomic fundamentals, secure financial stability and enforce a simpler and equitable tax regime.”
A separate resolution adopted by the PCL said , meanwhile, that “while the lowering of income taxes would lead to a reduction in government revenues–the lifeblood of the government–the expansion of the VAT, if legislated separately, would mean additional sources of funds for vital rural development projects of our respective Local Government Units, including the needed investments in health, education, and infrastructure for the Filipino people under Ambisyon 2040”, which is the Duterte administration’s blueprint to eradicate extreme poverty, transform the country into a high-middle economy by 2022, and to high-income one by 2040.
The PCL, chaired by Councilor Danilo Dayanghirang of Davao City, said in its resolution that the League is backing TRAIN because it “recognize[s] the need for infrastructure and social programs for urban and rural development.”
“We hope that this simple gestures of expressing our approval will help the upper house to decide on this urgent bill,” said the PCL in a letter attached to the resolution. The letter was signed by Dayanghirang and PCL national president Luis “Chavit” Singson of Narvacan, Ilocos Sur.
The version of the TRAIN approved by the House is a consolidation of HB 4774 –the original bill endorsed by the Department of Finance (DOF) and authored by Quirino Rep. Dakila Carlo Cua –with 54 other tax- related measures.
President Duterte has certified the TRAIN as an urgent and priority measure while the executive committee of the Legislative-Executive Development Advisory Council (LEDAC) has included the bill in its priority list that it wants approved before the yearend.
Aside from local government executives, the TRAIN has also garnered the support of 19 former secretaries and undersecretaries of the DOF and heads of the National Economic and Development Authority(NEDA).
The tax reform package also has the backing of the country’s local and foreign business chambers, domestic and multilateral financial institutions, civil society organizations, health advocates, and economic advocacy groups.