Rep. Joey Sarte Salceda of Albay files HB 4688, or the Tax Reform for Acceleration and Inclusion (TRAIN) bill. This bill envisions to create a tax system that is simpler, fairer, and more efficient, characterized by low rates and a broad base that promotes investment, job creation and poverty reduction. This is in line with President Rodrigo Duterte’s commitment to “Tunay na Pagbabago” or real positive change for the Filipino people, that includes, among others, more inclusive growth manifested by a comfortable life for all, improved public services, more and better jobs, and more money in the people’s pockets; and safe, health, and peaceful communities.
The key features of HB 4688 are:
1. Full and immediate adjustment of Personal Income Tax on the first year – the PIT income bracket creeping is one of the most horrific and protracted social injustice. The Philippine PIT is the most regressive in the entire Asia. And we do this to the most dependable pillar of taxes – the employees whose share of nationbuilding is automatically withheld, with compliance at almost 99% since they have no choice. The net benefit would be P156bn.
2. It provides that 25% of the compensating revenues from excise tax on petroleum of P165bn will be earmarked for subsidies to the lowest 50% by way of fare vouchers and direct income transfers to be administered by DWSD and to be designed by an inter-agency committee to include DBM, DSWD and DOF. The direct income transfers will make the entire tax package more progressive with the lowest 10% seeing incomes rise by 12%. It will be effective for 3 years.
3. The annual inflation adjustments on excise tax on petroleum will not be implemented if the Dubai crude exceeds $85/barrel in the prior year.
4. This will be the centerpiece program that seeks to reduce poverty to single digit and grow the economy by 9% and transform the Philippines into an Asian economic powerhouse, an OECD by 2028 with $1.2trn GDP
Read the full bill here: hb-4688-tax-reform-for-acceleration_and-inclusion-bill