By Jovee Marie N. dela Cruz
THE House Committee on Ways and Means has directed the Department of Finance (DOF) to tweak its proposal lowering personal-income tax (PIT) and the accompanying offsetting measures, citing “contentious provisions” that need to be addressed for faster approval.
With this, Committee on Ways and Means Chairman and Liberal Party Rep. Dakila Carlo E. Cua of Quirino said they have decided to push back the timetable for the bill’s passage in the House to around June 2017.
“Most likely it will pass the panel in January next year and the plenary in the middle of 2017,” Cua told the BusinessMirror. “[We decided to move the measure’s approval] because we are still finalizing our version of the measure and the DOF is the one drafting it.”
According to Cua, they still need to settle contentious provisions in the DOF’s bill, which was submitted by the agency to Congress in September.
Offsetting measures
The imposition of excise tax on petroleum, removal of value-added tax (VAT) exemptions for senior citizens and person with disabilities (PWDs) and ad valorem tax on automobiles are among the offsetting measures being pushed by the DOF to cover for the estimated P159 billion in foregone revenues from the planned changes in PIT rates. Lawmakers, however, rejected some of these proposals.
Cua said they now expect the finance department to retain the VAT exemptions for senior citizens and PWDs.
Cua said the lower chamber also wants to include a provision on revenue-collection efficiency in the tax-reform package, instead of removing the VAT exemptions for senior citizens and PWDs as what the DOF wants.
He said lawmakers also want the DOF to exempt workers earning P25,000 monthly, or P300,000 annually, and below from the PIT.
However, the DOF proposal seeks to exempt from PIT only those with a monthly salary of P20,833, or P250,000 annually.
“We will see the final version once the DOF resubmits the bill to Congress,” Cua added.
In the current setup, those earning P10,000 or less per month pay a 5-percent income tax, while those with yearly earnings of P500,000 and above pay a 32-percent income tax.
‘Drop auto excise tax’
Meanwhile, Cua said he personally opposed the plan of the DOF to impose excise tax on automobiles to help solve the traffic crisis.
“As a representative of Quirino, the imposition of excise tax on automobiles to solve traffic is unfair to us [people of Quirino]. They should find other solution to solve it,” he said.
“If you ask me, I do not 100-percent subscribe to that notion because this [traffic] issue is limited to the urban areas, like Metro Manila, Cebu and a few other parts of the country. In places like Quirino or maybe Mindoro, traffic is not much of a problem. So we would like also for the people who are in the provinces to have the option to purchase a vehicle at an affordable package,” Cua added.
Earlier, Cua admitted that the country’s car industry will be affected with the ad valorem tax on automobiles being pushed by the DOF as one of offsetting measures.
“We have to admit that they will be affected. We will talk to [the DOF] about this; maybe there should be classification of vehicles [depending on the selling price]. We have to remember we are using cars as our economic tool and not just for luxury,” the lawmaker added.
He said the imposition of an ad valorem tax on automobiles will give an additional P40 billion to P50 billion in revenue to the government.
Under the DOF version of the bill, if the net auto manufacturer’s price/importer’s selling price is P600,000, the excise tax will be 5 percent.
If the net manufacturer’s price/importer’s selling price is P600,000 to P1.1 million, the excise tax will be 20 percent of net manufacturing/importation price.
If the net manufacturer’s price/importer’s selling price is P1.1 million to P2.1 million, the excise will be 40 percent of net manufacturing/importation price.
If the net manufacturer’s price/importer’s selling price is P2.1 million, the excise tax will be 60 percent of net manufacturing/importation price.
The bill said the brackets reflecting the manufacturer’s price or importer’s selling price, net of excise and VAT, will be indexed by the secretary of finance once every two years, if the change in the exchange rate of the peso against the dollar is more than 10 percent from the date of effectivity of the act.
No rush to tackle ‘sin’ tax
The Senate, set to adjourn for Christmas recess this week, is in no rush to take up a P14-billion additional revenue measure on the verge of being passed in the House of Representatives reverting to two-tier “sin tax” rates for high-priced and low-end cigarettes.
This was confirmed over the weekend by Sen. Juan Edgardo Angara, chairman of the Ways and Means Committee, tasked to review all tax proposals before such money measures emanating from the House are taken up by senators for plenary consideration and approval.
“There is no version of that [House] bill here,” Angara said, indicating no senator has filed a counterpart bill yet. “Nobody filed it here.”
The House of Representatives last week passed House Bill 4144 on second reading aimed at reverting to the two-tier tax rates from the existing unitary tax on all cigarette brands, as provided in Republic Act (RA) 10351, also called the Sin Tax Reform Act.
Angara acknowledged concerns that amending the bill could negate efforts by health advocates to discourage smoking habits that lead to cancer by imposing higher tax on all brands of cigarettes. “If unitary tax, there will be no high end and low end….There is no more classification.”
The senator noted, however, the House version passed on second reading last week would jack up cigarette tax rates at a higher level “because next year it [tax rate] is supposed to be 30. We have a two tier this year. Next year it’s going to be unitary. Ang gusto nila is to preserve the two tier, but the higher rate.”
He expects the tax measure would be transmitted to the Senate soon after it is passed by the House on third and final reading, but could not say for sure the bill would be passed by congressmen before adjourning for Christmas recess later this week.
House passage of bills
The House is expected to pass this week the cigarette-tax bill, as well as a measure increasing by P2,000 the monthly pension of the Social Security System (SSS) pensioners.
House Majority Leader and PDP-Laban Rep. Rodolfo C. Fariñas of Ilocos Norte, chairman of the House Committee on Rules, said these two measures will be approved before Congress goes on break on Wednesday.
Fariñas said House Bill 4144, which seeks to amend RA 10351, or the Sin tax Reform Act, will give an additional P14-billion government revenue while curbing smoking in the country.
Cua said the proposal will help generate additional revenues for the government. “We see that this measure will bring about additional revenues to the government, and perhaps, since it proposes a higher rate or excise tax on tobacco, as compared to the scheduled rate in 2017, we hope that it also addresses or further improves the law’s ability to curb smoking or the prevalence of smoking.”
Party-list Rep. Eugene B. de Vera of ABS, principal author of the measure, said his bill will protect local tobacco farmers, especially those from Northern Luzon, who would be displaced by the uniform excise tax rate.
With Butch Fernandez
20 comments
sang-ayon ako kung alin man ang magpapabuti sa bansa natin!
kahit ano pa yan basta sa ikabubuti ng lahat!
dapt magawa na ang dapt gawin para naman sa kaayusan ng bansa!
wala naman yan maitutulong sa bansa natin
manahimik ka ikaw ang walang naitutulong!
suportahn lang natin ang magpapalago sa bansa natin
tma nman yan para hindi maka lusot sa tax
tama yan sir bebot dpat mag bigay sila ng tax
dapat kasi marami malaki din ang kita nila eh!
ano nman ang mga palabas ng mga tao na ito
tama yan baka maka lusot ka sa pagbayad ng tax
haha akala nya siguro
kung para naman yan sa lahat hindi na yan kailangan pang hadlangan.
kahit anong mang yari malaki ang tiwala ko sa house.
alam ko naman para yan sa bawat isa.
tumigil nga kayo sa mga kalokohan nyo!
utak talangka ka din noh!!!!
kaya hindi umaasenso ang pinas dahil sa taong tulad mo este sa anay na tulad mo.
Sana mawala na ang PIT sa mga minimum wage earners!
malaking tulong to kung magagawa agad kasi naman yung karamihan sa mga pinoy mababa lang ang mga sahod