House OKs new bill with higher automobile excise tax schedule
- Author: Zachary Reyes Jun 02, 2017,
Jun 02, 2017, 18:57
The new piece of legislation, House Bill 5636, which will be known as the Tax Reform for Acceleration and Inclusion (TRAIN) bill, is a centerpiece of the current administration and was approved by the House of Representatives after President Rodrigo Duterte gave it a certification of urgency.
The other sources of revenue would be the tax on sweetened products (P47 billion); increased excise tax on automobiles (P36 billion); and lifting of value added tax exemption on several items and services (around P90 billion).
When passed to law, TRAIN will lower personal income tax (PIT), though will increase excise taxes on commodities such as automobiles.
The bill, yet to be published and which still needs Senate approval, is expected to be a leaner version of an initial draft that drew opposition from some lawmakers to measures deemed to burden low-income families.
Consumers can expect gasoline fuel (regular, unleaded and leaded) to receive an additional excise tax from its current rate of PHP 4.35 per liter to PHP 7 per liter in 2018, PHP 9 in 2019 and PHP 10 in 2020.
The bill, which was revised from its original form under HB 4774, mandates the lowering of personal income taxes, while increasing excise levies in oil, cars and imposing a new one on sugary products.
One problem: There is no tax bill. Auto excise levies for importers will also be raised.
Aside from fuel taxes, the bill also imposes a new sugar-sweetened beverage tax of P10 per liter.
Officials from the Executive branch, however, said the bill will make the tax system simpler and more equitable.
Social support coming from the bill will also "offset" the negative impact of tax hikes, he said.
The 8 percent tax on the self-employed and professionals will now only be imposed on gross receipts in excess of PHP250,000.
Meanwhile, the "ultra-rich" individuals earning up to P5 million annually will see their income tax rate rise to 35 percent.
Republicans - who control the House and the Senate - have said they will pass a tax reform plan this year. But discussions can only begin in July when the second regular session opens.
"Any such dilution could be negative for the country's credit rating prospects and could eventually also limit the government's planned infrastructure drive", Wan said.