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The House of Representatives approved, on a 246-9 vote with one abstention, its version of the first package of the proposed comprehensive tax reform bill titled the "Tax Reform for Acceleration and Inclusion Act (TRAIN)" ("Bill") on 31 May 2017.
The first tax reform package seeks to cut personal income taxes among compensation income earners. This includes raising the exemption for compensation-income earners to those earning an annual income of Php250,000 (about USD 5,000) from the previous threshold of Php10,000 (about USD 200) annually. There is likewise an increase in the annual income thresholds for each tax bracket, which will result in reducing taxes due from those who would thus be considered as falling within the lower tax brackets. The reduction in personal income taxes, however, brings a corresponding proposal to raise excise taxes on fuel, new cars and sugary drinks. The Bill also proposes the removal of certain value added tax exemptions, such as those for the lease of residential units with a rent not exceeding Php10,000 per month. The Bill is expected to raise an additional Php133.8 billion in government revenues, or about 0.8 percent of gross domestic product in 2018 alone, which could be used to finance President Duterte's infrastructure program as well as programs on education, health and social protection.
Finance Secretary Carlos Dominguez III stressed that the proposed tax reform measures will further increase investors' confidence to the Philippines. He hopes for the approval of the first package before end-2017. The Senate will resume deliberations on the tax reform bill once sessions start in July. Should the Senate approve the House of Representatives' proposed bill, this will be forwarded to the President for signature before it is published and can be enforced as a law.
Presidential Communications Operations Office ("PCOO") Undersecretary Noel Puyat and Assistant Secretary Kristian Ablan urged both chambers of Congress to pass the Freedom of Information ("FOI") Bill during an FOI Conference held on 15 June 2017.
Mr. Puyat mentioned that the implementation of the FOI stands as one of the key pillars of the Duterte administration in its bid to "bring back the faith, trust and confidence of the people in the government". The FOI Bill has already hurdled the committee level at the House of Representatives, while the Senate version is already up for plenary debates. The Bill will cover all government agencies, departments, and bureaus, among others, unlike the executive order issued by President Duterte in 2016 which only covers the executive branch of government.
The FOI Bill embodies the two aspects of the right to information as mandated by the 1987 Constitution, namely, full public disclosure and citizens' access to information. Aside from reiterating the Constitution's mandate to disclose the Statements of Assets, Liabilities, and Net-Worth of certain public officials, the Bill also requires government agencies to publish public interest documents or records on their website. The Bill also mandates every citizen's right to ask for and receive information from government, and sets the procedure for requesting access to such information and documents. The Bill also imposes administrative and criminal liabilities for violating the right to information.
Following the passage of Credit Surety Fund Cooperative (Republic Act No. 10744 or the "CSF") Act on 6 February 2016, the heads of the Bangko Sentral ng Pilipinas, Department of Finance and the Cooperative Development Authority are to complete the signing of the Implementing Rules and Regulations ("IRR") this June-July so that it may be published and enforced.
CSF is a fund generated from contributions of well-capitalized and well-managed member-cooperatives / non-government organizations, local government units, governmental financial institutions, and other institutions / government agencies. The CSF shall serve as security for the loans that will be obtained by qualified Micro and Small Business Enterprises ("MSMEs") from banks by way of surety covers, in lieu of hard collaterals.
The passage of the CSF Act and the signing of the IRR is expected to provide MSMEs with access to financing, which is seen to be the roadblock for MSMEs' continued growth in the Philippines. The IRR, in particular, will standardize the technical and financial support and delineate the roles of the concerned government institutions. With the signing of the IRR, the number and reach of operating CSFs are expected to increase.
The House of Representatives, in a 220-0 vote, approved House Bill 5670 ("Bill") dubbed as the "Free Irrigation Services Act", which seeks to strengthen assistance to farmers, agrarian reform farmers, and indigenous cultural communities by providing them with free irrigation services.
Under the Bill, the Government shall promote and institutionalize irrigation systems that are free, effective, suitable, applicable and efficient as a key strategy to achieve genuine agricultural development. Apart from granting full subsidy of irrigation fees, farmers are also relieved of all unpaid irrigation service fees, back accounts and the corresponding penalties. The Bill also mandates the National Irrigation Authority to provide technical and financial assistance to local government units, all farmers, agrarian reform farmers, and members of the indigenous cultural communities with respect to irrigation systems located, utilized, and managed in their respective jurisdictions / areas.
The Bill is expected to be passed in the Senate before the year ends, according to one of its authors. Should the Senate approve the proposed Bill, this will then be forwarded to the President for signature before it is published and can be enforced as a law.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Gatmaytan Yap Patacsil Gutierrez
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