Duterte marks tax reform bill as urgent

Metro Manila (CNN Philippines, May 29) — President Rodrigo Duterte certified the tax reform bill as "urgent" in an effort to have the House of Representatives pass the measure by Friday, before they go on recess.

The certification was given following a memorandum from the Department of Finance (DOF) and relayed on Monday through a letter to House Speaker Pantaleon Alvarez from Executive Secretary Salvador Medialdea.

According to a release from the DOF, Presidential Legislative Liaison Office head Adelino Sitoy was also furnished copies of the letter.

In Finance Secretary Carlos Dominguez III's memo to the President, he wrote that a certification of the bill as urgent could "help ensure timely and full passage of the tax reform package before the close of the session on June 2, 2017, so that the benefits of the reform can be felt sooner."

The Tax Reform for Acceleration and Inclusion Act (TRAIN) Bill is part of the DOF's Comprehensive Tax Reform Program, and provides for lower personal income taxes but higher excise tax on fuel, new cars, and sugar. Duterte previously backed the tax reform plan, which the government is banking on to rake in money for its increased expenditure on infrastructure.

It currently sits in the House as House Bill 5636, a substitute measure for over 50 other tax-related bills. Its iteration in the Senate is Senate Bill 1408.

However, some members of Congress have called the measure anti-poor. Critics of the bill claim working Filipinos benefit from lower personal income tax, but the poor pay for it through heightened tax on fares, diesel, and sugar.

Related: Burden of taxes on poor with new excise, sugar tax - Deputy Speaker

Officials from the executive branch, however, have claimed otherwise and said that the bill must be approved as a package to work effectively.

Dominguez claims that not passing the bill would leave the country in an "unsustainable financial position" and "more vulnerable to fiscal risk." In a statement, the DOF estimated it would cost "an extra P30 billion in annual debt servicing and P100 billion more in higher borrowing costs for the public."

"More importantly, non-passage of Package 1 will disrupt the much needed increase in spending on infrastructure, education, health and social protection that can help improve the lives of the poor and vulnerable," Dominguez said in the memo to Duterte.

Senate cannot push for the tax reform until the House of Representatives approves it. After the House adjourns on June 2, it will reopen on July 24.