‘Misconception’ blamed for Senate’s poor support on TRAIN 2

“Well, actually, maybe because of a misconception that TRAIN 2 will increase taxes,” Roque said in press conference held in Ipil, Zamboanga Sibugay.. (ALFRED FRIAS/PRESIDENTIAL PHOTO)

MANILA — The Senate’s poor support to the passage of the Comprehensive Tax Reform Program (CTRP) Package 2 could be due to the “misconception” that it will increase taxes, Malacañang said on Thursday.

Presidential Spokesperson Harry Roque was reacting to Senator Juan Miguel Zubiri’s statement that nobody from the Senate is interested to sponsor the CTRP’s Package 2 bill, also known as Tax Reform for Acceleration and Inclusion (TRAIN) 2.

“Well, actually, maybe because of a misconception that TRAIN 2 will increase taxes,” Roque said in press conference held in Ipil, Zamboanga Sibugay.

On the contrary, Roque said, TRAIN 2 will reduce corporate taxes.

“So it is not true that new taxes will be imposed. What the TRAIN 2 intends to accomplish is to lower corporate taxes,” he said.

A Department of Finance (DOF) study showed that the Philippines has the highest corporate taxes among Southeast Asian countries.

“I think it’s a matter of telling the Senate that, first, what is TRAIN 2 and I think we can overcome the initial hesitancy,” Roque explained.

He said the Presidential Legislative Liaison Office (PLLO) should take the initiative to address the misconception of the Senate towards the CTRP’s Package 2.

Roque also allayed fears that foreign companies might transfer to other countries in Southeast Asia if government continues to push for the passage of CTRP’s Package 2.

“You know the DOF has conducted (a) study in this regard and found out that the incentives have nothing to do with the decision of the companies where to invest,” he said. “What is important for the investors will be first, the stability, predictability and availability of manpower.”

The TRAIN was signed into law by President Rodrigo Duterte in December last year with the goal of achieving a simpler, fairer, and more efficient tax system in the country.

The law aims to exempt those earning an annual taxable income of PHP250,000 and below from paying personal income tax and raised the tax exemption for the 13th month pay and other bonuses to PHP90,000.

At least 30 percent of the incremental revenues to be raised from the TRAIN will be used for social services, targeting 10 million poorest households for 2018.

The massive infrastructure projects under the Build, Build, Build Program and the education sector will also be funded through the CTRP.

In his third State of the Nation Address (SONA) last Monday, Duterte asked Congress to pass all the remaining packages of the CTRP within this year.