Was it a slip of the tongue or House Majority Leader and Camarines Sur Rep. Rolando Andaya intentionally spilled the beans on the government’s supposed “secret” about the true intentions of package 2 of the TRAIN (Tax Reform for Acceleration and Inclusion), euphemistically re-titled by state financial managers as Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO)?

In a recent press conference, Andaya revealed that TRAIN 2 can provide the needed funding source for an impending supplemental budget bill that would contain allocations for the implementation of the Bangsamoro Organic Law (BOL) and the payment of the balance in Internal Revenue Allocation (IRA) the national government owes the country’s local government units.

“And the only new revenue I can see in the offing will be the TRAIN 2,” said Andaya, once the budget secretary and chairman of the House Committee on Appropriations.

Andaya’s revelation directly contradicted claims by officials of the Department of Finance and the Department of Budget and Management that TRAIN 2 will not earn additional cash for the government. Instead, it will be cause “revenue deficit’ of about P60 billion, once implemented.

Such assurance was declared by key officials of the two departments in recent budget hearings in the House of Representatives.

But congressmen are skeptical that officials have not been candid about TRAIN 2, a sequel of the TRAIN 1 which is being battered by public criticisms for allegedly triggering rising inflation in the country.

Currently under plenary debate in the Lower Chamber, House Bill No. 8083 (TRAIN 2 or TRABAHO), seeks to lower corporate income tax from 30 percent of a corporation’s earnings to 25 percent but will offset the revenue cut by repealing over 120 special investment tax incentive laws. HB 8083 will also repeal the law granting government-owned and -controlled corporations tax exemptions.

Andaya said the BOL’s proposed allocation of P100 billion is not part of the proposed 2019 General Appropriations Act submitted by the DBM.

Also, there is no provision in the proposed national budget that will allocate the payment of even a portion of the estimated P498.85 billion in IRA that the national government failed to distribute to LGUs from 1992 up to 2012.

In a recent decision, the Supreme Court upheld the contention of Batangas Gov. HermilandoMandanas that the BIR erred in failing to include the collections of the Bureau of Customs of national internal revenue taxes to the IRA share of local government units for at least two decade.

Andaya said a supplemental budget will have to be passed by Congress to address the budgetary requirements for these fiscal obligations of the government.

“So, there could be a possibility that a supplemental budget is filed. But again, pwederinnaman i-tandem yang supplemental budget doonsa TRAIN 2,” he said.

Andaya added: “We cannot have a supplemental budget nawalangkaakibatnapondongpagkukunan. So knowing how DBM thinks, it should be a revenue-neutral or a deficit-neutral supplemental budget.”

Meanwhile, former President and now Speaker Gloria Macapagal-Arroyo pitched in for TRAIN 2’s approval by allaying fears that the proposed tax reform law may scare away investors.

Arroyo said the TRAIN 2’s provision for the cancellation of over 120 investment incentive laws is not a reason for investors to stay away from the country.
She said infrastructure and the ease of doing business are the most important factors for business ventures.

In a press briefing Friday in San Simon, Pampanga, Arroyo said incentives may indeed attract investors but firms that will bring in huge investments will be more interested in the infrastructure development and good business environment in the country.

Source: https://news.mb.com.ph/2018/08/18/will-train-2-finance-bangsamoro-unpaid-ira/