Speaker Gloria Macapagal-Arroyo vowed to pass at the soonest possible time another Tax Reform for Acceleration and Inclusion (TRAIN) package.
In fact, the House Committee on Ways and Means has started hearings on House Bills 8252 and 8323, which cover the fourth package of TRAIN.
Arroyo had said she would lead the House of Representatives in pushing for the Duterte administration’s comprehensive tax reform program.
Out of the 15 legislative measures being pushed by Duterte, the House has already approved 11.
“Our plans for this Package 4 is to legislate. That’s our plan — to legislate. Our agenda is to carry out the agenda of President Duterte so he has his 15 measures that he enumerated in the SONA. We already passed 11 of them,” Arroyo said.
When asked about the timeline for TRAIN 4, Arroyo said, “Well, we cannot dictate the timing of democratic processes. We just do our best.”
The purpose of the TRAIN 4 is to redesign the financial sector taxation into a simpler, fairer, more efficient, and revenue neutral tax system.
The measures underscore the significance of the financial sector in the long-term growth of the national economy. These intend to implement capital income and financial intermediation to encourage savings as well as develop and deepen the capital markets.
Like the other TRAIN package, this set aims at putting the country in a better position to compete in attracting capital investment, which is essential to finance structure, create more and better jobs, and boost the inclusive and sustainable growth of the economy.
The bills aim to address the concerns of the financial sector which include complicated tax structure, susceptibility to arbitrage, uneven playing field, inequitable distribution of tax burden, uncompetitive tax system, high administrative and compliance cost, and lack of support for capital market development.
Finance Undersecretary Karl Kendrick Chua explained that Package 4 is about harmonizing rates in the financial and capital tax system, and, by doing so, deepening the capital markets of the country.
Chua cited the four main components of the fourth package. First, it shall harmonize a multitude of capital income taxes into a single rate of 15 percent. He gave the assurancethat this will benefit numerous poor, middle class, and ordinary Filipinos, whose source of savings and investment are long-term time deposits.
Secondly, Package 4 shall reduce the gross receipt tax to five percent, which shall ease business transactions.
It shall also lessen transaction taxes, mainly the documentary stamp tax. Among others, this shall reduce the high rates of non-life insurance, and in so doing promote more insurance as the country faces and mitigates more disasters.
Lastly, it shall repeal 32 out of the 41 special laws that grant special rates and tax exemptions.