AN ESTIMATED P30 billion in additional oil excise tax collections are expected to go to social benefits programs in 2018 once the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) is passed by the Congress in full, a high-ranking Finance official said Friday.
Finance Undersecretary Karl Kendrick Chua said the government would implement its biggest social benefits program yet once the TRAIN is passed by the Congress in full, given that almost P30 billion or 40 percent of incremental revenues from the adjustments in oil excise tax collections estimated at close to P74 billion in 2018 will go to targeted subsidies for the poor and other social mitigation measures.
Chua said a key component of the social benefits program was the targeted cash transfer, in which the poorest 10 million households in the country would be given bi-annual subsidies to shield them from the impact of the revenue-enhancing measures under the TRAIN.
Chua, updating Finance Secretary Carlos Dominguez III on the tax reform package during a recent Department of Finance executive committee meeting, said each household qualified to receive the TCT would get P1,200 in the first quarter of the year, and another P1,200 in May before the beginning of the school year, or a total of P2,400 for the entire year as provided under the TRAIN.
Under House Bill 5636 or the version of the TRAIN approved by the House of Representatives, the funds will be secured from the additional revenue from the adjustments in oil excise taxes expected to reach P74.4 billion in 2018, the targeted first year of implementation of TRAIN.
“This is the biggest social mitigating measure under the tax reform,” Chua said. “The TCT is a social protection investment.”
Chua said “the amount of cash transfer was calculated to fully offset the moderate but temporary increase in prices faced by the average household in the bottom 50 percent.”
Besides the TCT, the government will also implement the Pantawid Pasada, a social assistance project for commuters and public transport, and the jeepney modernization program to ease the impact of oil excise tax increases on commuters and the land transport sector; and the Pantawid Kuryente to help small power consumers in missionary electrification areas, Chua said.