MANILA — Lowered personal income tax (PIT) and higher take home pay for 99 percent of the country’s 7.5 million individual taxpayers is the leading achievement of the approved Tax Reform for Acceleration and Inclusion (TRAIN) law which President Rodrigo Duterte will sign soon.
Albay Rep. Joey Sarte Salceda, one of the bill’s principal authors in the Lower House, said the approved TRAIN version will raise PHP140 billion plus another PHP36 billion in income transfer, combined to some PHP176 billion annually.
It constitutes the single biggest income and wealth structural transfer to low and middle income class in Philippine socio-economic history.
The TRAIN measure, passed overwhelmingly by the Lower House last May, will be the game changer it was meant to be towards the country’s economic growth and globalization, said Salceda, a noted economist.
It is envisioned to break the margin of inequality and injustice between the marginalized and the elite. It amends the decades-old tax schedule for personal income, which is one of the highest within the ASEAN.
The pro-poor feature of the bill has lent it unprecedented support from both the government and private business sectors, as well as civil society groups and non-government organizations making it a most understood and appreciated piece of legislation, he noted.
After six months of deliberation, the Senate-House bicameral conference committee finally ironed out differences in the proposals from both chambers.
“The TRAIN measure finally came out to deliver its gains directly to the people, in the form of reduced PIT and raised earnings,” Salceda said.
Certified urgent by Duterte, the tax package was designed to raise the living standard of Filipinos and build a strong economy for the country.
Its final version, ratified by the Senate-House bicameral committee last December 13, saw cuts in PIT and added levies on fuel, cars, mining, coal, and tobacco.
The original and attractive feature of the House TRAIN version is the lower tax rate for fixed-income earners, and the exemption of first PHP250,000 annual taxable income, which the bicameral committee approved outright.
They also raised the tax exemption for the 13th month pay and other bonuses to PHP90,000.
The TRAIN’s target revenues will still be close to the original goal sought by HB 5636, consolidated from the proposals of Salceda, Quirino Rep. Dakila Carlo Cua and the Department of Finance, which was some PHP176 billion annually.
As conceived, 30 percent of the revenue will go to education — primarily to fund the Universal Access to Quality Tertiary Education Act, health programs, nutrition, anti-hunger programs, social protection, social welfare and benefits program, employment and housing, while 70 percent goes to ‘Build, Build, Build’ infrastructure program, military infrastructure, sports facilities for public schools, and potable drinking water in all public places, among others.
Under the approved TRAIN, those earning PHP250,000 and below annually will be tax exempt, while those earning up to PHP400,000 will pay 20 percent of the excess over PHP250,000. Those earning more will pay fixed amounts plus a percentage tax on the excess of their respective income brackets. Johnny C. Nunez/PNA-northboundasia.com