Senators warn tax reform bill may not pass due to disagreement on coal tax

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Senator Loren Legarda, a staunch environmentalist in the senate, expressed concern that a different version of the bicameral committee's TRAIN bill was not circulated among senators.

Metro Manila (CNN Philippines, December 13) — Two senators warned Wednesday that they may stand up against the tax reform bill if an alleged change in the provision in the coal tax is not justified.

Senators Loren Legarda and Joel Villanueva said the bicameral conference committee earlier this week agreed to raise the coal tax from P10 per metric ton to P50 in 2018, increasing by P50 each year until it reaches P150 in 2020.

This proposed tax was welcomed by green groups such as World Wildlife Fund and Greenpeace as a step towards reducing the country's dependence on coal and fossil fuels.

But they claimed hearing that the final version of the Tax Reform for Acceleration and Inclusion (TRAIN) bill plans to exempt all local coal producers.

Legarda, a staunch environmentalist in the senate, expressed concern that a different version of the bicameral committee's TRAIN bill was not circulated among senators. She said this version was one where the coal tax will only affect imported coal.

"Minagic lang (Somebody did 'magic' on it)... show me the transcript where that was discussed," Legarda told reporters.

"Ni minsan wala sa transcript nakalagay na para sa imported coal lamang. Huwag natin lilihisin ang usapan," she added. (Translation: "Not once in the transcript is it mentioned that it (the tax) is for imported coal only. Let's not mislead the discussion.")

Under Section 16 of Presidential Decree 972, local coal operators and producers have been exempted from excise and value-added tax (VAT) since 1976.

Senator Villanueva noted that the bicameral conference committee repealed that presidential decree.

"But it turned out ngayon lumalabas na binago 'yun ("But it turned out now that it was changed")," said Villanueva.

If the ratification of the TRAIN bill does not push through Wednesday, it puts the Duterte administration's plans to implement the tax reform package by 2018 on hold.

President Rodrigo Duterte called the tax reform package as one of the urgent bills to pass in Congress. The President has to receive the consolidated version of the bill for veto or approval before it takes effect.

Congress is set to end its session on December 15 for the Christmas break. Today is the last session day for the Senate.

This TRAIN bill is expected to generate P130 billion to help fund government projects, including Duterte's "Build Build Build" infrastructure program.