Tax reform bill goes to the Senate

PHILIPPINES - In Brief 01 Jun 2017 by Romeo Bernardo

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246 out of 256 congressmen who voted approved the Duterte administration’s proposed Package 1 of tax reform measures yesterday, two days after the President certified the measure as urgent.House Bill No. 5636 or the “Tax Reform for Acceleration and Inclusion Act” will now be transmitted to the Senate.Events in the last few days have given us more confidence that the tax reform will hurdle the Senate before the year ends. 1. When the President certified the bill as urgent, he addressed the certification to the Senate as well, sending a categorical signal that he is behind it.The Senate President reacted by filing a counterpart bill in the Senate (SB 1408), similar to an earlier bill filed by the chairman of the House ways and means committee.We expect this to speed up Senate deliberations. 2. It is evident that Finance Secretary Sonny Dominguez not only has the President’s ear (most recently seen in the appointment of a career central banker as the next BSP governor) but the political savvy to get support for key priorities.We expect him to be able to sway key members of the Senate as well. 3. Some key members of the Senate are up for re-election in 2019, including the chairman of the ways and means committee.Analysts expect them to study the tax bill with an eye out for their re-election bids, which may mean some hesitancy in passing the unpopular sales tax increases tacked in Package 1 meant to compensate for the revenue losses from the popular tax cuts for low-to-middle income workers.Yet experience shows that a popular president has tremendous influence on the chances of a candidate’s re-election and there is no arguing that the President is popular. Even on the con...