House OKs tax reform bill on third reading

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Metro Manila (CNN Philippines, May 31) — The House of Representatives on Wednesday overwhelmingly approved on third and final reading the comprehensive tax reform package.

A total of 246 lawmakers were in favor of House Bill 5636, while nine voted against it.

The Tax Reform for Acceleration and Inclusion Bill was approved before Congress adjourned its first regular session.

The House passed the bill on second and third readings in one session since President Rodrigo Duterte certified it as urgent.

READ: Duterte marks tax reform bill as urgent

It lowers the personal income tax of regular wage earners from 32 percent to 25 percent, but raises excise tax on fuel, new cars, and sugary drinks.

READ: Deputy speaker: Burden of taxes on poor with new excise, sugar tax

The bill also proposes the removal of certain Value Added Tax exemptions, such as those for the lease of residential units with a rent not exceeding P10,000 per month.

READ: Lawmakers eye VAT on house rent

A 20-percent tax for lottery winnings will also be imposed.

In his letter to Congress last Monday, President Duterte says the swift passage of the tax reform bill will allow the government to finance its massive infrastructure projects and increase the budget for health, education, and social programs.

Since Congress is now on break, the Senate can only discuss the bill after the second regular session starts on July 24.

While there is an outpouring of support for the bill, those who oppose it argued that the measure is anti-poor. Critics claim working Filipinos benefit from lower personal income tax, but the poor will shoulder higher fares because of more expensive fuel and costlier goods.

READ: Tax reform bill critics: It's anti-poor

Officials from the Executive branch, however, said the bill will make the tax system simpler and more equitable.