Former top officials of the Finance Department on Tuesday asked the Senate to preserve the original form of the Tax Reform for Acceleration and Inclusion Act or Train to support the government’s massive investment program.
Roberto de Ocampo, a former Finance secretary and a member of the Foundation for Economic Freedom, said during a recent hearing of the Senate ways and means committee that he was supporting the proposal in its original form as the measure would improve tax compliance and bring in more investments to create more jobs.
Former Finance undersecretary Romeo Bernardo, who also attended the hearing, asked the senators “to preserve as much as possible the original revenue requirements” under the original Train package as proposed by the DoF. He said this would support government programs such as the law on providing free tuition and other fees for enrollees in state universities and colleges, the pension for uniformed personnel and the increased social security benefits for retirees.
Former Finance chief Margarito Teves underscored the “importance and urgency” of passing Train in its original form to “enable the government to finance our growing needs as a developing country, such as accelerating infrastructure development, closing the gaps in health and education and improving social protection programs for the poor and marginalized,” while staying within the manageable deficit level of not more than 3 percent of gross domestic product.
The position of the FEF, which has among its prominent members Teves and Bernardo, was read by the latter during a recent Senate ways and means committee hearing a week before the Senate’s version of the Train was approved by the panel and endorsed by its chair, Sen. Juan Edgardo Angara, for plenary approval.
The original DoF proposal for Train aims to lower personal income taxes while raising an additional P157 billion in net incremental revenues during the first year of its implementation in 2018. The House version approved a P134-billion package.
Former National Economic and Development Authority director-general Felipe Medalla, who is now a member of the Monetary Board and FEF, said Train was necessary to maintain the Philippines’ debt-to-GDP ratio and reduced cost of borrowing, which is now even lower than that of Malaysia and Indonesia and on par with Thailand.
Medalla said the tax reform would shift the burden of paying income taxes from salaried workers to the rich.
According to FEF’s position, “ the comprehensive tax reform program will allow every Filipino an equitable opportunity to contribute to a sustained and truly inclusive economic growth.”
