MANILA (UPDATED) - Finance Secretary Carlos G. Dominguez III is "very pleased" with the bicam-approved version of the Tax Reform Acceleration & Inclusion (TRAIN) Bill.
This, despite the introduction of provisions that weren't proposed by the Department of Finance (DOF), including excise taxes on coal, tobacco, and invasive cosmetic procedures.
"We did not propose it in Package One. However, we respect the right of the legislature to introduce taxes as they see fit. It's part of the law and we accept that," Dominguez told reporters in an interview.
Based on DOF estimates, the approved tax reform measure would yield around P130 billion in net revenue on its first year of implementation.
"The net revenue effect is certainly very close to the bill that was passed in the House. So we are very pleased that the legislature has given us the wherewithal to begin a really serious infrastructure program," Dominguez said.
Under the bicam-approved TRAIN bill, the coal excise tax rate will be raised to P50 per metric ton in the first year of implementation, P100 in the second year, and P150 in the third and succeeding years from the current P10 per metric ton.
The increase in coal tax was originally planned for the DOF's tax reform package five.
The P10 coal excise tax rate has remained unchanged since 1988 while the local industry has been exempted from paying excise tax since 1976.
Congress on Wednesday night ratified the TRAIN bill despite objections from several lawmakers and senators and a deleted coal excise tax provision, a lawmaker said.
Asked if the insertion of the coal tax could pose a legal question later on as this provision did not originate from the lower House, Dominguez said the levy is not considered a new tax, saying the bicam only adjusted the 3-decade-old coal tax rate.
"I think what that [Constitution] refers to is a totally new tax cannot be introduced other than by the House of Representatives; however, if the tax already exists, they can adjust it," he said.
Aside from coal, the final bill also doubled the tax rates of all non-metallic minerals and quarry resources, as well as metallic minerals including copper, gold and chromite to 4 percent from the current 2 percent; and on indigenous petroleum to 6 percent from the current 3 percent.
The lawmakers also decided to increase the rates of the tobacco excise tax to P32.5 from the present P30 per pack in the first half of next year, and to P35 starting July 2018 to December 2019.
Between 2020 and 2021, the tobacco excise taxes will further rise to P37.5, and from 2022 to 2023, the rate will increase to P40.
From 2023 onwards, the levy on cigarettes will jump 4 percent annually.
Starting next year, a 5-percent tax will be collected from invasive cosmetic procedures, surgeries, and body enhancements aimed at improving, altering, or enhancing the patient's appearance.