Amended tax reform bill gets okay

The House committee on appropriations chaired by Davao City Rep Karlo Alexei B. Nograles amended and approved this week the funding provisions of the substitute bill on the Tax Reform for Acceleration and Inclusion (TRAIN) measure which specifies the earmarking of the incremental revenues from tax reform proposals.

The earmarking of revenues is provided in Section 36, Paragraphs F and G of the substitute bill to 55 measures.

There was no amendment to Paragraph F titled “Earmarking of Incremental Revenues from the TRAIN Act” which provides that: “For three years, not more than 40 percent of the yearly incremental revenues generated from the petroleum excise tax under Section 21 of the Act shall be allocated to fund a Social Benefits Program wherein qualified beneficiaries shall be provided a Social Benefit Card, likewise allocation for granting fuel vouchers to qualified transport franchise holders shall be sourced from the same incremental revenue , an inter-agency committee led by the Department of Finance (DOF), and comprising the Department of Social Welfare and Development (DSWD), Department of Education (DepEd), Department of Transportation (DOTr), Department of Energy (DOE), Department of Budget and Management (DBM) and the National Economic and Development Authority (NEDA) shall oversee the implementation of the program.”

It further provides that: “For the same periods, the remaining yearly incremental revenue shall be allocated for infrastructure, health, education and social protection expenditures.”

Meanwhile, there were several amendments to Paragraph G titled "Health Promotion Fund." The committee approved the provision that 50 percent of the tax collection from the P10 per liter excise tax on sugar sweetened beverages (SSB) shall accrue to the General Fund (GF).

As to the remaining 50 percent of the tax collection from the SSB excise tax, the committee adopted the Department of Finance (DOF) proposal as manifested by Finance Undersecretary Karl Kendrick Chua that 85 percent of the proceeds will be allocated to priority programs for national government as enumerated by Nueva Ecija Rep Estrellita B. Suansing, the main author of the SSB excise tax proposal, without mentioning the breakdown of allocation percentages, while the remaining 15 percent will be for the benefit of the sugar farmers.

“This is only to specify what are the priority programs to be funded without mentioning the allocated percentages. This will allow the departments involved, the DBM and Congress to expound in the budget what these allocations should be after reconsidering the bigger picture. This would also allow the DBM’s flexibility in prioritizing the funds,” said Chua.

Chua said for the SSB tax, as currently proposed under Suansing’s bill which was integrated into the TRAIN bill, the P10 excise tax per liter will yield P47 billion in the first year of implementation.

Asked by ACT Teachers partylist Rep Antonio Tinio (Party-list, ACT Teachers) how much is the 15 percent allocation for sugar farmers will be, Chua said 15 percent of those earmarked for specific uses of the P47 billion will yield P3.5 billion. “That is the amount we will be providing the sugar farmers,” said Chua.

Quirino Rep Dakila Carlo Cua, chairman of the committee on ways and means and one of the authors of the TRAIN bill, formally proposed to the appropriations panel the adoption of the DOF proposal that in the Health Promotion Fund portion: 15 percent shall be allocated to the advancement of sugar farmers; while the balance of 85 percent will be used for programs identified by Suansing to be implemented by the national government without allocation percentages. “So the programs will be enlisted without the amount,” said Cua.

The committee then approved the programs enumerated by Suansing that will be funded by 85 percent of the SSB excise tax revenue.

Suansing cited the programs as: 1) For the Department of Health (DOH) to support the operationalization and monitoring of non-tax measures to prevent non-communicable diseases , including regulatory measures on marketing, mandatory labeling and sale of unhealthy food and beverage products, nationwide information and advocacy measures to curb lifestyle related risk factors; 2) Direct provisions and incentive-based measures to increase access to and affordability of healthier food and beverage products; and promotion of oral health; 3) For the Department of Education (DepEd) to provide public schools with sports facilities and access to potable drinking water, to develop and sustain school-based feeding programs; 4) For prevention programs and awareness campaigns against obesity, overweight, and dental carries, and other diet-related health programs using educational, environmental, policy and other public health approaches; 5) For the Department of Public Works and Highways (DPWH) for the provision of potable drinking water supply in all public places; 6) and For the Food and Drug Administration (FDA) under the DOH to support the nutrition labeling and other related measures and implementation of its mandate to ensure the safety, efficiency, or equality of health products as defined by RA 9711, or the Food and Drug Administration Act of 2009.

Suansing said the allocation for sugar farmers will advance their self-reliance through cooperative projects that will increase productivity, provide livelihood opportunities, develop alternative farming systems and ultimately raise farmers’ incomes.

Lastly, Nograles proposed the inclusion of a new section in the TRAIN bill, requiring the submission of reports on the earmarking of incremental revenues from TRAIN as provided in Section 36, Paragraphs F and G .

The new section, according to Nograles, shall be titled “Reportorial Requirements” which provides: “The inter-agency committee created under Section 36, Paragraph F and the concerned departments/agencies/ beneficiaries under Section 36, Paragraph G hereof shall submit to the President of the Senate of the Philippines and the Speaker of the House of Representatives a detailed report on the expenditure of the amounts earmarked. The reports shall likewise be posted on the official website of the agencies concerned. With further inclusion of the committee on the House committee on appropriations and the Senate committee on finance.”

“Should this tax measure pass, I will see to it the House committee on appropriations will strictly monitor the implementation and ensure that taxpayers' money will be spent correctly and with corresponding transparency,” said Nograles.

Overall, Nograles expressed hope the TRAIN bill lives out to what it is expected to achieve, which is to relieve the tax burden of the middle to lower income class.

“With this, we expect more of the breadwinners of society to bring home more of their hard-earned income and wages back to their respective families. As to the revenue-raising measures in the tax package, I hope that we will see more government action in alleviating the burden of the sectors that will be affected by these changes, particularly the drivers, farmers and others. We hope that the revenues raised will translate to more programs and projects that will be positively felt by the people, especially in rural and far-flung areas in the different regions. We hope these will spur more economic activity, provide more jobs and translate to more social benefits for the masses,” said Nograles.

The TRAIN bill will be brought back to the committee on ways and means after the inclusion of the amendments made by the appropriations committee, then it will be reported out to the plenary for second reading approval.