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Senate President Pro Tempore Ralph Recto

Senate eyes removing oil tax in TRAIN bill

The Senate will seek the scrapping of the excise tax on petroleum products under the Tax Reform Acceleration and Inclusion (TRAIN) since the proposed P6 per liter increase will prove burdensome to consumers, Senate President Pro Tempore Ralph Recto said.

“The philosophy of burden-sharing should not mean P140 billion in additional revenues will have to be shouldered all by consumers. Those with wider shoulder or those with a bigger income should pay more in taxes. So we can make it 50-50. The consumers will bear half, the remainder should be provided by industry,” he said.

“Under the proposal, consumers bear all the burden. If we can look for other sources of taxes that will spare the consumers, we can do away with the tax on oil (products),” Recto added.

Recto who is also a former ways and means committee chairman said that instead of imposing an excise tax on petroleum products, there are other possible sources of revenues on certain financial transactions such as documentary stamp tax.

“Or why not have a progressive system on corporate taxes? Or give a tax break to 99 percent of small enterprises? The one percent who are big (enterprises), we can increase the tax rates,” Recto said.

The senator said he will try to put forward his recommendations when plenary debates or period of interpellation on the proposed (TRAIN) resume two weeks from now.

Socioeconomic Planning Secretary Ernesto Pernia, however, urged the Senate to make its version of TRAIN bill “closer” to the version of the House of Representatives.

Pernia said he would like to see better net revenue for the government in the Senate version of the TRAIN bill to support the administration’s program, particularly funding the infrastructure projects of the Duterte administration.
It was after the Senate Committee on Ways and Means has came up with Senate Bill 1592, a watered down version of the TRAIN bill, giving the government lower revenue estimates for next year compared with House Bill (HB) 5636.

The Department of Finance (DOF) has estimated that the approved version of the Senate panel will only raise P59.9 billion for the government in 2018, which is half of the P119.4 billion estimated net revenue in HB 5636.

Both the upper and lower houses’ versions are lower than the proposed version of the DOF, which aimed for P149.6-billion revenue for the government during the first year of implementation of the tax reform program.

“We’re still hoping that the Senate version will improve and move closer, if not, the same level of the House version at least,” Pernia said.

.“We are working behind the scenes and trying to talk to other senators to support our desire and our aspiration,” he added.

Pernia also mentioned that the Senate can look into tweaking provisions on excise tax to get higher revenue for the government.

Moreover, Pernia said the administration remains optimistic to roll out the first package of the comprehensive tax reform program by January 2018.

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