Philippines: Alvarez says House has “exclusive jurisdiction” over TRAIN will block coal tax hike

  • House Speaker Pantaleon Alvarez on 7 Dec 17 maintained that the House of Representatives has “exclusive jurisdiction” over the Duterte administration’s proposed tax reform program as he criticized the Senate for voting to increase excise tax on coal.
  • The Senate last week voted to hike the excise tax on coal to as much as PHP300 per metric ton in 2020 from PHP10 per metric ton, the rate in effect since the 1970s.
  • The proposed increment will be gradual, climbing to PHP100 in 2018, PHP200 in 2019, and finally to PHP300 in 2020.
  • The increase, however, is not yet final as the chambers of Congress still need to harmonize their respective versions of the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN). A bicameral conference committee is expected to wrap up its final report by Dec 17.
  • Alvarez said under the Constitution, Senators can only propose substantial amendments on TRAIN, which are subject to the approval of the House from which tax measures should emanate by law in the first place.
  • He said the lower house won’t allow the proposed raise in coal tax, citing the surge in power cost that will be triggered by the measure.
  • Business groups had cautioned that the proposed coal tax under the Senate-approved version of TRAIN is expected to send shock waves through the power sector, thereby worsening the already poorly situated power cost competitiveness of the country.
  • Trade Secretary Ramon Lopez, for his part, had also warned that the looming spike in levies imposed on coal could threaten the Philippines’ accelerated manufacturing growth target of over 10% in 2018.

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