Lawmaker: TRAIN is 'trabahong tamad'

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Highlights

  • PH has low tax collection efficiency rate
  • Quimbo: Gov't should go after tax evaders, smugglers
  • TRAIN 2 might hit education, health sectors

Metro Manila (CNN Philippines, August 9) — The tax reform package is lazy work, opposition lawmaker Rep. Miro Quimbo (Marikina City, 2nd District) said on Thursday.

Speaking to CNN Philippines' The Source, the lawmaker said the Finance Department was penalizing taxpayers through higher fuel prices, but not doing enough to go after tax evaders.

"Ang hindi narerealize ng tao is that even with TRAIN 1 and TRAIN 2 — pardon my word — (it's) trabahong tamad," said Quimbo. "Ang problema natin is our tax effort, meaning yung ability to collect."

[Translation: What people don't realize is that TRAIN 1 and TRAIN 2 — pardon my word — (is) lazy work. Our problem is our tax effort, our ability to collect.]

Tax collection efficiency in the country is about 14 percent of the country's gross domestic product (GDP), the lawmaker said. He said it falls far behind neighboring countries.

In 2016, Vietnam had a tax collection efficiency rate of 25.1 percent, and Singapore at 24.1 percent.

"Ibig sabihin, we're not doing our job. (The Department of Finance) thinks that hindi kami makakolekto kasi ang batas kulang," Quimbo continued. "Pero sa totoo lang, lahat ng batas na gusto nilang gawin, puro passive taxes-hindi yung kailangan mong hanapin pa."

[Translation: That means we're not doing our job. (The) DOF thinks that they can't collect because the law is lacking. But the truth is the laws they want to pass only have passive taxes — not (taxes) which you have to look for.]

The remarks come amid pressure on Congress to pass the second package of the Tax Reform for Acceleration and Inclusion (TRAIN) Law. It has been widely criticized amid unforeseen inflation rates, higher prices for basic goods, and a lack of financial assistance for the poor.

Its first package, implemented this year, lowered personal income tax and raised excise taxes on fuel, sugary drinks and new cars, among others.

"They just sit on their asses, and each time somebody pumps gas, kumukolekta sila [they collect something]," said Quimbo. "What you should be doing is looking for companies who are not paying — all these smugglers na pumapasok sa atin [that come in]."

Last March, Senator Richard Gordon previously noted that ₱905 billion was lost from 2012 to 2016 due to smuggling and value-added tax leakage.

The government is also missing out on over ₱300 billion a year due to tax holidays, Customs duty exemptions, and other incentives.

The second tax reform package is expected to lower corporate income tax, but critics fear it will withdraw tax incentives from certain sectors, like health and education. This means that tuition in private schools and hospital fees could rise.

Quimbo believes that corporate income tax should be lowered, but not at the expense of other sectors.

"Sila ang naghahanap ng pagkain [They are the ones looking for food]. What's happening is, they're hunting those that are already in the zoo," said Quimbo. "Yung nagcocomply na, iyon ang pinaparusahan [Those who are complying (with the law) are being punished]. We should be looking for the big game who are not complying."

At the House of Representatives, Speaker Gloria-Macapagal Arroyo has confirmed the second package of tax reform would be a priority. Meanwhile, Senate Majority Leader Migz Zubiri said the Senate is open to passing it. However, other senators are hesitant due to public backlash from the first package.