SEVERAL senators, including key Senate leaders, signalled support for an emerging majority consensus for Congress to reject removal of the existing value-added tax (VAT) exemption on books and publications as part of the second-round reforms.
“I won’t allow it,” Senate President Vicente C. Sotto III told the BusinessMirror on Monday, affirming the Senate leadership’s position when asked about the Department of Finance (DOF)-backed proposal to impose the VAT on instructional materials as part of TRAIN 2.
Sotto earlier introduced Senate Bill 1906, the chamber’s version of the DOF-endorsed initiatives under the Tax Reform for Acceleration and Inclusion 2, cutting corporate income tax but also lifting 123 tax incentives and special laws. Included here is the VAT exemption for books and publications.
The House of Representatives passed on third and final reading its version of the TRAIN 2, which it called Tax Reform for Attracting Better and Higher Opportunity, or “Trabaho” bill.
Senate President Sotto signalled the Senate leadership’s position, replying “yes” when asked if they will heed appeals for lawmakers to retain the existing tax exemptions granted to books and publications in Republic Act 8047 or the Book Publishing Industry Development Act of 1995.
Critics of the DOF-endorsed initiative had warned that it puts the country at risk of running afoul of the Florence Agreement, where it is a signatory. That international accord, ratified by 100 countries, “ensures the free flow of educational, scientific and cultural books and other publications between and among countries,” the Philippine Center of International PEN (Poets, Playwrights, Essayists, Novelists) earlier said in a statement.
Senate Majority Leader Juan Miguel F. Zubiri shared Sotto’s stand against taxing books and publications, saying: “Yes, I will object to that provision.”
Sen. Francis G. Escudero clarified, however, that there is still no Senate version of the Palace-endorsed TRAIN 2 bill, even as he also affirmed his position on the issue.
“That [VAT imposition on books and publications] is just a proposal, which I am not in favor of,” Escudero said, adding that means he “will support deletion” of such provision if the plan is included for adoption in the Senate version of TRAIN 2.
Sen. Emmanuel Joel J. Villanueva confirmed he will enlist the support of fellow senators to
ensure the existing VAT exemption of books and publications is retained. Villanueva added: “As of today, I do not think there are five members in the Senate willing to support the measure primarily because of the timing.”
“Definitely, since that is for education,” Sen. Joseph Victor G. Ejercito replied in a text message to the BusinessMirror when asked if he will support the existing VAT exemptions.
In a televised interview, Sen. Grace Poe also expressed misgivings over rushing approval of TRAIN 2, suggesting that lawmakers “need to be able to see the pros and the cons.”
Citing reports attributing inflationary effects triggered by TRAIN 1, she voiced concerns that certain social mitigating measures were not rolled out from TRAIN 1, adding: “I don’t know if it’s time for us to actually consider TRAIN 2. There are so many things going on that we need to prioritize before this.”
Poe also recalled her peer Sherwin T. Gatchalian, chairman of the Senate Committee on Economic Affairs, as saying he was all for it [TRAIN 2], “but they have to change some of the provisions so that it doesn’t cause any job losses.”
Asked to gauge Senate support for TRAIN2, Poe admitted that “a lot of my fellow senators are actually quite apprehensive about it, especially at this time. But I think it’s our job to really read the provisions, and if we have to, introduce amendments or object to it, but definitely with one thing in mind: Will it actually help the economy or will it worsen the
current situation?”