‘Tweaks’ on TRAIN 2 supported, slammed
The Department of Finance (DOF) said it was open to “tweak[s]” in the Tax Reform for Acceleration and Inclusion (TRAIN) program, even as an opposition bloc vowed to stop the enactment of its second tranche that was approved by the House ways and means committee on Wednesday.
Finance Undersecretary Karl Kendrick T. Chua said Thursday that the DOF would ask Congress to tweak TRAIN 2, or the Corporate Income Tax and Incentives Reform Act (Citira), to ensure fiscal prudence.
“One thing that we proposed as a tweak is to have a provision that says if the corporate income tax reduction is going to contribute to a larger-than-programmed deficit, then the President has the power to temporarily suspend the next reduction. If we (won’t) do that, the deficit will exceed the programmed level and that’s not acceptable. So that is one proposal: that it’s OK to reduce (the corporate income tax) so long as the deficit is met,” Chua said.
The self-explanatory Citira bill, previously referred to as the Trabaho (Tax Reform for Attracting Better and Higher-quality Opportunities) bill in the 17th Congress, continues to be tackled by the current 18th Congress, two years after the first tranche of the TRAIN program was enacted.
The first tranche sought to reduce personal income taxes while adjusting taxes on other goods. Its enactment in December 2017 prompted criticism amid a brief surge in inflation.
The six-member Makabayan bloc vowed to oppose the Citira bill at the House plenary, saying the tax increase under the second tranche was meant “to offset the losses from reduced corporate income taxes under TRAIN 2, estimated at P52 billion per 2 percentage point cut.”
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