Close  

Impasse on local coal tax delays TRAIN ratification

The ratification of the Duterte administration’s Tax Reform for Acceleration and Inclusion (Train) measure was delayed on Wednesday after a last-minute impasse between senators and congressmen over taxes on local coal.

But a compromise was eventually reached when the lawmakers met after the joint congressional session that extended martial law in Mindanao for one year.

ADVERTISEMENT

The impasse emerged after congressmen insisted that the local coal industry be exempted from excise and ad valorem taxes when the Train is implemented next year.

But senators maintained that the government stands to lose P5 billion if the local coal industry continues to enjoy the excise tax exemption it had been enjoying since 1976, or the past 41 years.

FEATURED STORIES

Sen. Joel Villanueva even went to the extent of saying that only one company produces 95 percent of local coal and that was the Consunji Group.

Senator Loren Legarda, on the other hand, argued that the congressmen had already agreed to the repeal of Presidential Decree No. 972 exempted domestic coal from any form of taxation and they should abide by the agreement.

She said the House contingent said they misunderstood the agreement to mean only imported coal would be taxed and not domestic coal.

Domestic consumption of coal is 60 percent imported and 40 percent locally-produced, she said.

But the congressmen later relented and agreed to impose excise taxes on local coal, but exempted the industry from the 12 percent Value Added Tax (VAT), said Sen. Sonny Angara, chair of the Senate ways and means committee.

“Excise tax agreed to will apply to both imported and domestic coal. Current VAT exemption stays,” Angara said.

The reconciled bill raised the excise tax on coal from P10 per metric ton to P50 metric ton in the first year of implementation, P50 in the second year and P150 in the third and succeeding years.

ADVERTISEMENT

A media briefer prepared by the Senate committee on ways and means said that the P10 coal excise tax rate has remained unchanged since 1988 while the local industry has been exempted from paying excise tax since 1976.

With the hurdling of the impasse, the Senate was expected to ratify the first of five comprehensive tax measures on Wednesday night, the last session day of Congress before it goes on a month-long break on Dec.15.

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: coal tax, Philippine news updates, tax reform, Tax Reform for Acceleration and Inclusion
For feedback, complaints, or inquiries, contact us.



© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.