Congress ratifies TRAIN raising taxes on coal, tobacco


MANILA  — The Congress on Wednesday night ratified the the controversial tax reform package or the Tax Reform for Acceleration and Inclusion (TRAIN) bill which raises taxes on coal, mining, and tobacco, among others.

Both chambers–the Senate and House of Representatives–voted to pass the bicameral conference committee report after reconciling differences of their respective versions.

The ratified report will be transmitted to Malacanang for President Rodrigo Duterte’s signature.

In the Senate, 16 senators voted in the affirmative namely senators while four voted in the negative namely Senators Paolo Benigno Aquino IV, Risa Hontiveros, Antonio Trillanes IV, and Panfilo Lacson, and zero abstention.

The bicameral committee agreed to adopt the provision of the Lower House that allows a second tranche of the personal income tax reform that would further reduce income tax rates starting 2023.

This tax reform package would raise the take-home pay of Filipinos, according to Senator Juan Edgardo Angara, sponsor of the measure in the Senate.

Self-employed and professionals earning below PHP250,000 will be exempt from income tax starting January 1, 2018.

On the other hand, those with gross sales or receipts of PHP500,000 and below will be exempt from three percent percentage tax.

The tax exemption cap of 13th month pay and other bonuses was raised to PHP90,000.

Other features

One of the new features of the proposal included during the bicam conference is increased excise tax on tobacco products from the current PHP30 per pack to PHP32.50 from January to June next year.

It will also be raised to PHP35 from July 2018 to December 2019, PHP37.50 from 2020 to 2021, PHP40 from 2022 to 2023 and a four percent annual indexation in 2023 onwards.

The package also raises coal excise tax from PHP10 to per metric ton to PHP50 per metric ton in the first year of implementation; PHP100 in the second year, and PHP150 in the third and following years.

Excise tax rates on all non-metallic minerals and quarry resources, and all metallic minerals including copper, gold and chromite increased from the current two percent to four percent, and on indigenous petroleum from the current three percent to six percent.

For fuel petroleum products, new taxes will be imposed on LPG increasing every year: PHP1 in 2018, PHP2 in 2019, and PHP3 in 2020.

For diesel fuel, a PHP2.50 tax would be imposed starting 2018, PHP4.50 in 2019, and PHP6 in 2020.

Tax on regular and unleaded premium gasoline would be raised to PHP7 in 2018, PHP9 in 2019 and PHP10 in 2020.

Sugar-sweetened beverages will be taxed PHP6 tax per liter for beverages using caloric and non-caloric sweeteners and PHP12 per liter for beverages using high fructose corn syrup.

Automobile taxes were also raised–those valued up to PHP600,000 and up would be imposed a four percent tax; 10 percent for PHP600,000 up to PHP1.1 million; 20 percent on over PHP1.1 million to PHP2.1 million and 50 percent on over PHP2.1 million.