I voted to reject the Senate's version of the Tax Reform Acceleration and Inclusion (TRAIN) Bill. The TRAIN bill ran out of steam for comprehensive reform. It fell short of its promise to genuinely reform our tax system to make it more equitable and beneficial to poor families, and reshape consumer behavior towards a more health-conscious populace.
Despite the gains in increasing taxes on coal and mining, which I was more than happy to lend my voice and vote to, I feel that not enough care and not enough meticulous effort has been put into making sure that the TRAIN becomes more than just a tally of new revenue flows and another burdensome law to tax the people.
Lowering the VAT rate: A missed historic opportunity"
If the Senate was not in such a rush to get the TRAIN bill passed, we would all have had enough time to simmer down, compose ourselves, and see the wisdom of the proposal to lower the VAT rate from 12 percent to 10 percent and then to subsequently align it with the VAT regimes in the region. This was my bottomline on this proposed measure. After all, the lines of exemption are about to be significantly reduced in number. After all, we introduced new revenues from the doubling of rates for documentary stamp taxes. The Senate missed a historic opportunity to lessen the burden of our countrymen and women from this indirect and regressive form of taxation.
I have taken pains to review the claims of the Department of Finance (DoF) that everyone will come out being better off as a result of the TRAIN bill that they brought to the Senate. I find that 1.7 million near poor wage earners are in danger of becoming poorer. Those who came from the wrong side of the tracks are vulnerable of falling into the cracks of our tax system.
I find that although the proposed cash transfers are sometimes enough for the average-sized family and even more than enough for small families, larger families including those who have senior citizens under their care, will be affected more by the indirect taxes of the TRAIN bill.
Due to the inadequacy of the cash transfers, I proposed a reduction in the VAT rate and an expansion of the safety nets for large families among the poor. I believe that a reduction in the VAT rate would have been one of the best safety nets for poor people who will be affected most by this tax measure. Sadly, this was not carried by the Senate's version of the TRAIN Bill.
I am also disheartened by notions that the safety nets and mitigating measures in TRAIN might be treated as mere suggestions by the Executive. It is unfortunate that the amendments that I and some of my fellow Senators sought to introduce to strengthen the safety net procedures didn't seem to warrant collegial deliberations. The lowering of the VAT rate was my bottomline. The non-expansion, worse, the lowering of earmarks meant for social protection programs was the deal breaker.
Because of these, I voted to reject the Senate's version of the TRAIN BILL
Source: Senate of the Philippines