Dominguez thanks Senate for passing its TRAIN version

November 29, 2017

Finance Secretary Carlos Dominguez III said in a statement on Wednesday the government is now one big step closer to reforming the country's tax system for the first time in over two decades--and providing a steady revenue stream to its ambitious infrastructure buildup--with the Senate's approval of its version of the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN).

Thanking the Senate for approving its version of TRAIN on third and final reading, Dominguez expressed hopes that both chambers could wrap up bicameral deliberations on the first of the government's five tax reform packages in time for the submission of the final version to President Rodrigo Duterte by December--so that a new law could be signed and implemented as scheduled by January 2018.

Dominguez said "the Senate’s timely approval of its TRAIN version moves the government one big step closer to overhauling the tax system for the first time in two decades with the primary benefit going to 99 percent of the country’s taxpayers who are to get higher take-home pay as a result of substantial cuts in their personal income tax rates or--better yet--outright exemption from income taxation."

The Senate on Tuesday night voted 17-1 to pass the TRAIN on final reading.

Senate Bill No. 1592, the chamber's version of the TRAIN, was sponsored by Senator Juan Edgardo Angara, who chairs the Senate ways and means committee.

According to Angara, "under the Senate-approved tax reform package, 60 percent of the incremental revenues will go to infrastructure programs, 27 percent will be allocated to social protection programs including the unconditional cash transfer to the poorest 10 million Filipino families and health, nutrition and anti-hunger programs, while 13 percent will be allocated to military modernization programs."

“We thank the Senate for its vote on its version of the tax reform bill. We hope that with the Senate’s swift action on the measure, the two chambers of the Congress can soon sit down in the bicameral conference committee to thresh out a reconciled version of the bill that would provide the most benefit for the majority of the Filipinos while raising additional revenues to support our infrastructure modernization program,” Dominguez said.

House Bill (HB) No. 5636, the TRAIN version approved by the House of Representatives last May 31.

The Senate version provides additional revenue-generating measures that are not in the House version of TRAIN. But both Senate and House versions provide for tax exemptions for those earning P25o,ooo and below.

Among the additional TRAIN measures approved by the Senate on third and final reading are the doubling of the prevailing documentary stamp tax (DST) rates, except for property, which will remain as is, and loans, which will increase by 50 percent.

The DST increases include those on bank checks that will double from P1.50 to P3; on original issue of shares of stock, P1 to P2; and sales or transfer of shares of stock, P0.75 to P1.50. DMS