January 31, 2018 – The Financial Services and Taxes & Tariffs (FSTT) Committee Meeting held its first meeting for the year on 31 of January 2018 from 10 a.m. to 12nn held at KMC Solutions.
Atty. Fabian de los Santos, a partner in SGV discussed about the first package of the Tax Reform for Acceleration and Inclusion (TRAIN). Salient points discussed were the following:
- TRAIN impact on the Philippine Economy- The Philippine Stock Exchange, Inc. (PSE) Index recorded the Philippines stock at the highest this 2018. The peso also strengthened because of the strong remittance and equity inflows. TRAIN is also credit-positive as it will envision addressing weak revenue generation. Lastly, inflation rate of the country at 2.4 % lower than expected of 3.4%.
- Vision of TRAIN- By 2020, it envisions to achieve high middle income status where the country’s gross national income (GNI) increases from USD 3,000 to USD 4,100 by 2022 in today’s money. By 2040, TRAIN aims for the Filipinos to enjoy stable and comfortable lifestyle.
- Impact of the Tax Reform in job creation, inflation, and better investment grade rating.
- Objectives of TRAIN- a) taxation to be simpler, fairier, and more efficient; b) more money in people’s pockets; c) fund investments to inclusive growth; d) complementary measures.
- Personal Income Tax- Income with PhP 250,000 annually will be exempted of the income tax.
- Philippines is the highest among ASEAN countries with 20-35% of personal income tax.
- Estate tax, donor’s tax rate, vat exemptions, and excise tax on cigarettes, automobiles, sweetened products, mineral products, were also discussed.
- Lastly, tax reform will fund the Build, Build, Build project of the administration at projected PhP8.4T, Education at PhP1.3.T, and Social Services at PhP781B.
In conclusion, the tax reform of the administration aims to fund its infrastructure project mainly that is hope to address the employment in the country and eventually the stregthened whole economy of the Philippines.