More execs back TRAIN

Date Posted : June 27, 2017

More execs back TRAIN

Date Posted : June 27, 2017

More government executives have come out to support the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) now pending in the Senate, calling it a “win-win proposition” that would reform the country’s “outdated” tax system and at the same help raise funds for the government’s unmatched infrastructure, health and education, and social protection programs.

They include top officials from the Bangko Sentral ng Pilipinas (BSP); the Departments of Budget and Management (DBM), of Health (DOH), of Transportation (DOTr) and of Energy (DOE); National Power Corp. (Napocor) and Land Transportation Franchising and Regulatory Board (LTFRB); and the National Economic and Development Authority (NEDA).

Director Rolando Toledo, who heads the DBM’s Fiscal Planning and Reforms Bureau, said the TRAIN “is a package that will be instrumental in the raising revenue effort and ultimately funding our development priorities for infrastructure and the social services which include health and education.”

The TRAIN, which is the first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), will also lead to a “simpler, fairer and more efficient tax regime” that will “invite more investments and put more money in the pockets of 99 percent of the population,” Toledo said at a recent hearing of the Senate ways and means committee.

“So in essence, the tax reform package is a win-win proposition, the reform package that we wish our legislators will support. And the DBM is fully supporting this package,” he added.

Director Reynaldo Cancio of NEDA’s National Policy and Planning Staff said that with fiscal sustainability a key element in realizing the Duterte administration’s goal of lifting six million Filipinos out of poverty by 2022, the TRAIN will provide “the necessary resources for financing important investments in infrastructure, human capital, and social protection.”

The BSP, represented by Director Zeno Ronald Abenoja of its Department of Economic Research, said: “We would like to reiterate our position in support of the comprehensive implementation of the tax reform program to raise the revenue base of the government and help refocus all the expenditures, including those for infrastructure and socioeconomic programs.”

“We think over the medium to long term, inflation would fall within the target range set by the national government in the next few years (of not more than 4 percent),” he added.

Kenneth Ronquillo, the director of the DOH Health Policy Development and Planning Bureau, said the Department “fully supports the [TRAIN] as this will allow the government to intervene better in the health sector.”

“The Philippines lags behind ASEAN (Association of Southeast Asian Nation) neighbors in terms of per-capita spending for health. We are at 6th in per-capita health expenditure in ASEAN, trailing behind Malaysia, Thailand, and Vietnam,” he said.

DOTr Assistant Secretary Mark Richmund de Leon said: “the Department of Transportation fully supports this tax reform measure because this will fund the proposed ‘Build, Build, Build’ program of the Duterte government.”

“In this tax reform measure, we are proposing that the earmarking be allocated to our public transport reform program to make sure that the financing for the new fleet of modern public transport vehicles, including the jeepneys, will be financed by this reform program,” De Leon said

“In addition to that, we’re proposing that public transport operators and drivers be trained to improve their capacities in managing their fleet,” he said.

For the LTFRB, which is under the DOTR’s supervision, the provision raising the rates for fuel excise taxes under the TRAIN, “will translate to the programs of the Department of Transportation having the necessary funding, having the necessary resources.”

“In the Department of Energy, we support our priorities for sustainable consumption. In that manner, we support this tax reform package,” said Assistant Director Jesus Anunciacion of the Energy Utilization and Management Bureau.

For Napocor vice president for administration and finance Lorna Dy, the TRAIN “will benefit especially the poor members of our society.”

“Definitely the National Power Corporation is 100 percent supportive of this,” she said.

Finance Secretary Carlos Dominguez III said earlier that the DOF will continue to hold dialogues with senators during the congressional break in the hope that they would act swiftly on the TRAIN bill when the Congress opens its second regular session in July and retain its original features as outlined in HB 4774.

“We can live” with HB 5636, “but of course it’s better if we get more,” he said.

The House of Representatives approved HB 5636 or the TRAIN by a 246-9 vote with one abstention last May 31 before the Congress’ sine die adjournment. HB 5636 is a consolidation of the DOF-endorsed bill—HB 4774 filed by Rep. Dakila Carlo Cua—and 54 other tax-related measures.

The Philippine Stock Exchange index (PSEi) went up by 90.37 points or 1.15 percent to close at 7,927.49 last June 1, or the day after the House had approved HB 5636 on third and final reading. It then closed at its highest level for this year last June 5 at 8,001.38 points, with PSE president Ramon Monzon quoted in media reports as saying that this breach of the 8,000 level was driven by “optimism over the developments in the DOF’s CTRP.”

An increasing number of international financial institutions have lauded HB 5636’s approval as a positive step to reforming the country’s tax system and boosting revenue, and a testament to the Duterte administration’s decisive leadership and firm resolve to pursue broad economic reforms and ensure the financial viability of its ambitious public investment program. These include Moody’s Investor Service, Fitch Ratings, Deutsche Bank, and Nomura.


-oOo-

Date Posted June 27, 2017

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