TRAIN 2 faces derailment at Senate despite Duterte push

Senator Juan Miguel Zubiri delivers his speech during the opening of the third regular session of the Senate.
INQUIRER PHOTO / NIÑO JESUS ORBETA

The Duterte administration’s second package of tax reforms could face an uphill climb in the Senate given concerns that it might lead to job loss and fewer investments, according to Majority Leader Juan Miguel Zubiri.

So far, nobody is willing to sponsor the package should the House of Representatives submit it to the Senate, Zubiri said.

President Rodrigo Duterte had pitched for the reforms in his State of the Nation Address to Congress on Monday and said he wanted to sign the measure into law by the end of the year.

The second package of the Tax Reform for Acceleration and Inclusion (TRAIN) Act focuses on rationalizing tax incentives given to investors and cutting corporate income taxes.

Zubiri said senators were nervous about the second package despite assurances from finance officials that it would not affect wage earners and small businesses.

Move to Vietnam

“But the fact is, a lot of businesses and industries are already complaining to us that they’re looking to take up shop elsewhere. They said that if their incentives would be removed, they would move to Vietnam,” he told reporters.

“Let us talk about this thoroughly. I don’t want to lose jobs because of this. We also don’t want to lose opportunities for jobs in the future,” he added.

Zubiri also said the senators wanted to first study the effects of the first tax reform package, known as the TRAIN Act 1, which has been blamed for the rising prices of basic goods.

Rise in inflation

The TRAIN law lowered income tax rates for many wage earners, but increased excise taxes on fuel, among other products. It has also been blamed for the rise in inflation.

Zubiri said finance officials had asked him to shepherd the second package of tax reforms through the Senate, but he declined.

“Nobody wants to sponsor it here, I can put that on record,” he said.

The tax measure is being tackled in the House, which will submit it to the Senate.

Zubiri said the President could pull his weight and ask his allies in the Senate to back the tax reform package, but the lawmakers would explain their position on the issue.

“I believe it is our responsibility as legislators and representatives of the people to let the President know what are the possible outcomes,” he said.

The Chief Executive may not be aware of the complete picture, since the information given to him by his closest advisers could be filtered, he added.

Meanwhile, Sen. Bam Aquino continued to push for the amendment in the TRAIN law. His bill seeks to suspend and roll back the excise tax on fuel once the average inflation rate surpasses the annual inflation target over a three-month period.