MANILA, Philippines – The House ways and means committee approved the first batch of tax reforms proposed by the Department of Finance (DOF) on Wednesday, May 3. 

With a vote of 17-4-3, lawmakers gave their approval to the comprehensive tax reform program, which includes the lowering of personal income tax rates and the reduction of value-added tax (VAT) exemptions to counter revenue loss. (READ: Duterte’s tax reform: More take-home pay, higher fuel and auto taxes)

The ways and means panel chaired by Quirino Representative Dakila Cua held a technical working group meeting on Wednesday morning, then brought an unnumbered substitute bill for the mother committee’s approval in the afternoon.

With the committee’s approval, the tax reform package will now be up for 2nd reading at the House plenary.

“Main features as proposed by Malacañang remain intact: lowering of personal income tax, new or higher excise taxes on fuel, expanded VAT coverage, and higher excise taxes on automobiles,” said ACT Teachers Representative Antonio Tinio, who voted against the bill.

Under the measure, the maximum rate of personal income tax will be reduced over time from the current 32% to 25%, except for high income earners.

Those earning P250,000 or below annually will be exempted from paying income taxes. The mandated 13th month pay up to P82,000 as well as other bonuses will still be tax-free. 

The “ultra-rich,” who comprise 0.1% of taxpayers, will be levied a higher rate of 35% from the current 32%.

The measure, however, also proposes higher excise taxes on refined petroleum products and automobiles, except for buses, trucks, cargo vans, jeeps, jeepney substitutes, and special purpose vehicles.

Tinio said he voted against the tax reform package because “excise taxes on fuel and expanded VAT coverage are anti-poor.”

He also said the ways and means committee is considering including in the substitute bill the proposal to have an additional P10 tax per liter of volume capacity on sugar-sweetened beverages and carbonated drinks.

Below is a copy of the substitute bill approved at the committee level.

– Rappler.com