MANILA, Dec. 14 (Xinhua) -- The Philippine congress has ratified the first package of the Comprehensive Tax Reform Program (CTRP) envisioned by the Duterte's administration which seeks to correct a number of deficiencies in the tax system to make it simpler, fairer, and more efficient.
Finance Secretary Carlos Dominguez said on Thursday that the ratification of the Package 1 or Tax Reform for Acceleration and Inclusion Act (TRAIN) paves the way for Philippine President Rodrigo Duterte to sign the bill into law this month. The administration plans to implement the new law by January next year, he said.
Dominguez said TRAIN will provide hefty personal income tax cuts for the average taxpayer.
Once the TRAIN is enacted into law, Dominguez said the additional revenue will help finance the Duterte administration's programs on infrastructure modernization dubbed as Build Build Build.
The ratified TRAIN bill exempts those earning an annual taxable income of 250,000 pesos (4,959.67 U.S. dollars) and below from paying the personal income tax (PIT) and raised the tax exemption for 13th month pay and other bonuses to 90,000 pesos (1,785.59 U.S. dollars). Further PIT reductions will be implemented starting 2023.
According to Finance Undersecretary Karl Kendrick Chua, who was among the resource persons in the bicameral conference committee meetings on the TRAIN, the remaining one-third involves provisions on the estate tax amnesty, a general tax amnesty, the proposed adjustments in the Motor Vehicle Users Charge and amendments to the bank secrecy law and automatic exchange of information.
Besides the revenue enhancing measures of adjusting the excise taxes on fuel and automobiles and broadening the value-added tax base, the ratified version also includes tax administration reforms, such as a mandatory fuel marking and monitoring program and a system that would enable the Bureau of Internal Revenue to check real time the financial submission of large taxpayers, "which will further improve the performance of our revenue generation agencies."
The Department of Finance submitted to the congress its original TRAIN proposal in September last year.
"The tax reform bill seeks to achieve a simpler, fairer, and more efficient tax system characterized by lower rates and a broader base, to encourage investment, job creation and poverty reduction," Dominguez said.
Presidential spokesperson Harry Roque said TRAIN, together with the complementary measures to be passed early in 2018 will yield more than 120 billion pesos (2.38 billion U.S. dollars) in revenue.
