Second tax package clashes with Senate wall

There is just one major problem: "

" This question is urgent, do not be part of the problem by ignoring it and I hope to sign package 2 before the end of the year. "year," said Mr. Duterte in his third state. Nation Address (SONA), referring to the second round of tax reforms.

"M. Duterte said: "I hope the Senate will do the same, maybe tomorrow, sir?

However, he asked for updates on the bill. The Senate Majority Leader, Juan Miguel F. Zubiri, told reporters Tuesday evening: " Wala talagang takers his amin na mag- sponsor ng (There is no taker among us to sponsor) TRAIN 2, "referring to the second package of the tax reform program for acceleration and inclusion which aims to reform the entire tax system to further shift the burden on those who can afford it and increase revenue collections.

– Republic Act No. 10963, which entered into force on January 1, significantly reduced personal income tax rates but increased or increased levies on several products and removed several exemptions value added tax.

rate gradually up to as low as 2 0% of 30% currently in order to bring them up to the level of most of Southeast Asia, and remove the redundant tax incentives that have deprived the government of 300 billion pesos in 2015, according to estimates of the Ministry of Finance. […] [W] ] We will have to wait for the House of Representatives to approve it and do the normal work that is basically sent here to the Senate so that we can discuss it, "added Mr. Zubiri

" ] Pero wala his amin gustong mag- sponsor niyan (But none of us wants to sponsor this). "

The executive plans to submit the other two to three other packages to Congress by the end of this month in the hope of obtaining their approval in the year, because one He expects legislation – particularly involving something as unpopular as taxes – to take precedence over the election campaign in the run-up to the May 2019 elections.

Mr. Zubiri reiterated his statement Wednesday, saying the tax measure has "very little support" in the Senate.

"What I had said was that he has very little support from my colleagues and in fact, no senator wants "Even if the House of Representatives approves the measure and it is automatically transmitted to us, the Senate should hold public hearings," he said, while acknowledging that "[d] definitely ". ] The development recalls the difficulties that the first tax package had raised in the House and that prompted Mr. Duterte to meet with Senate officials last March to try to facilitate navigation in this chamber. In his second SONA in July of last year, however, he alluded to difficulties in the Senate.

Senate Speaker Vicente C. Sotto III told reporters separately Wednesday that the Senate has its own version of the bills on fiscal rationalization.

"Most members of the Senate have the mentality of considering the possibility of contributing to the fight against inflation and rising commodity prices," said Mr. Sotto

. "It's our goal, so if ever these bills are introduced, whether it's about TRAIN 2 or not, if that's going to be done, we'll do it. will follow the Senate version of improving tax incentives. "

Senator Juan Edgardo Mr. Angara, Chair of the Senate Committee on Ways and Means, stated that separate bills had been tabled in the Senate. and rationalization of tax incentives

"There are separate bills on streamlining tax incentives. Two, I believe, and some bills to reduce the corporate income tax, from five to six. These bills are part of the second package, "he said in a text message to BusinessWorld .

When asked about the chances of adopting the second package in December, Mr. Zubiri said that the Senate should first study the effects of TRAIN 1 on overall increases in consumer prices, which have been deemed minimal by economic leaders – about 0.4% of the overall inflation of 4, 3% last semester

"The President, of course," But then, I believe it is our responsibility, as legislators or representatives of the people, to let the President know what the results are the peace process, "said Zubiri.

Senate Speaker, Pro Tempore, Ralph G. Recto, also said that the proposed measure could be difficult to pass by December, as Mr. Duterte asked.

"I support the objectives of tax reform 2 lower corporate income Taxes and rationalization of tax incentives, but with amendments," Mr. Recto said in a text message to BusinessWorld [19659000] "[It] can be difficult to pass before December. "

Wanted commenting, Budget Secretary Benjamin E. Diokno reminded the Senate of his responsibility to" respond to the President's demands, "adding that economic managers would raise the issue at the next meeting of the Advisory Council on Development. Legislative-Executive (LEDAC)

"The president is very clear: he wants all tax reform packages to be passed before the end of the year. We plan to summon the LEDAC as soon as possible, [so] we will denounce it, "Diokno said at a press briefing on Wednesday.

"We are optimistic that all tax packages will be adopted before the end of the year; otherwise, you will say goodbye to him. "

" It's either this year or forget it, because 2019 is an election year. The tax is generally unpopular, but let's see.

For his part, Finance Secretary Carlos G. Dominguez III said in a text to reporters: "I will speak to the Senate leaders.

Zubiri expressed "serious reservations" about TRAIN 2, particularly the provisions on tax incentives, and warned of the potential loss of jobs and investments if incentives were removed since companies that liked them could pack their bags. "While we welcome the lowering of the corporate income tax, we need to look at the potential loss of jobs on the plan to remove incentives given to several industries, including the BPO and the Export Manufacturers Who [has work forces that] "As a former chairman of the Trade and Commerce Committee, I was informed of the possible exodus of industries from our country if these incentives are lost. That is why, on a personal note, I am not in favor of this measure, but I will not prevent members of the Senate from discussing, amending, proposing bills. "

Mr. Recto for his part supported the objectives of TRAIN 2 but noted that he will propose amendments" to ensure that the work is not lost but created. "

Asked for comment , Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said the government should re-evaluate TRAIN 2 so that senators agree to sponsor the bill. "A lack of Senate sponsor for TRAIN 2 would be problematic because a legislator must sponsor the bill before it goes through the legislative process.The government should look for someone who can defend the law in the Senate and should probably re-evaluate the bill for someone to agree to eventually sponsor the bill, "he said in an email to BusinessWorld

For its part, the managing director of Regina Capital Development Corp., Luis A. Limlingan, Dec. in a text message to BusinessWorld : "The main obstacle is that every legislator has his own idea of ​​what is ideal for TRAIN 2 … Well, maybe then as in the case of Train 1, the President will have to meet the 24 senators so that they can discuss these apprehensions. "