The Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) has met the revenue goal of the government after the ways and means committee chairman introduced his amendments to Senate Bill 1592.
Based on the estimates by the Department of Finance (DOF), SB 1592, taking into consideration the proposed amendments, would yield P159.5 billion in revenue--a hundred billion more than the previous revenue estimate of P59.9 billion.
"We were able to meet the revenue target using the more comprehensive and accurate data that the DOF has provided the committee after the filing of the committee report," said Senator Sonny Angara, chairman of the ways and means committee.
The boost in the revenue was significantly sourced from the amendments to the provisions on the expansion of the value-added tax (VAT) base. From the repeal of certain VAT special laws alone, the estimated revenue gain is raised from P14 billion to P45.5 billion.
Another major source of revenue is the doubling of the prevailing documentary stamp tax rates which will approximately yield P40 billion.
Documentary stamp tax is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto.
This include stamp tax on bank checks which will be doubled from P1.50 to P3; on original issue of shares of stock, P1 to P2; sales or transfer of shares of stock, P0.75 to P1.50; certificates of profits or interest in property or accumulations, P0.50 to P1; among others.
Such amendment was first brought up by Senate Pro Tempore Ralph Recto during the period of interpellations.
"The stamp tax rates are already due for updating since such rates were set two decades ago just like our income tax rates. This increase in stamp tax rates will also improve the progressivity of the tax reform package, as this will mostly affect the rich who have the ability to pay additional taxes," Angara said.
Angara explained that the Senate ways and means committee sought to come up with a version of the TRAIN bill that would raise the take-home pay of Filipino workers by providing tax relief to 99% of individual income taxpayers and, at the same time, meet the revenue target so as not to impair the government's capability to finance its programs and projects.
The Senate version likewise provided more specific earmarking provisions so that revenues will be allocated to programs that will directly benefit the poor. This include the funding of the free college law, unconditional cash transfer for the bottom 50% poorest households, free medicines for poor families and feeding programs in areas with high incidence of hunger, infrastructure programs to address congestion and improve mass transport, among others.
Source: Senate of the Philippines