AMENDMENTS to the Senate’s tax reform bill — which had initially halved collections projected from the version approved by the House of Representatives last May — have raised forecast revenues that now top even the target of the Department of Finance (DoF), the head of the Senate Ways and Means committee said in a press release on Wednesday.
“We were able to meet the revenue target using the more comprehensive and accurate data that the DoF has provided the committee after the filing of the committee report [in the plenary],” the statement quoted Senate Ways and Means committee Chairman Senator Juan Edgardo “Sonny” M. Angara as saying.
Senate Bill No. 1592 — which has worried credit raters and economists due to the dilution of projected revenues that are otherwise supposed to help finance the government’s P8.44-trillion infrastructure program till 2022 — is now estimated to yield P159.5 billion in the first year of implementation, compared to just P59.9 billion when the measure secured Ways and Means committee approval in September.
The latest estimate also compares to House Bill No. 5636’s P119.4 billion when this version was approved on third and final reading last May 31, and the DoF proposal’s P149.6 billion (which itself was scaled down from P157.2 billion originally).
Mr. Angara attributed the revenue projection boost to the repeal of certain value added tax (VAT) exemptions that raised estimated additional revenues by P14 billion to P45.5 billion and to the doubling of prevailing documentary stamp tax rates to yield some P40 billion. Specifically, those whose rates doubled during the period of interpellations in plenary session included the stamp tax on bank checks (to P3 from P1.50 currently), on the original issue of shares of stock (to P2 from P1), on sale or transfer of shares of stock (to P1.50 from P0.75) and on certificates of profit or interest from property (P1 from P0.50).
It will be recalled that his purported control of Congress notwithstanding, President Rodrigo R. Duterte had met leaders of both chambers, and separately with members of the Senate majority bloc, in mid-March to emphasize the need to approve the measure after noting “resistance” and “rough sailing” then in the House.
The first of up to five tax reform packages cuts personal income tax rates and offsets projected foregone revenues from this step by removing some VAT exemptions, increasing excise taxes on oil products and automobiles, introducing a sugar excise tax, as well as simplifying estate and donor’s tax rates, among others.