Small stores oppose tax reform package
NO TO TAX MEASURE “Sari-sari” store owners like Rhoel Santos fear diminished income once Congress approves the Duterte administration’s tax reform package. —INQUIRER PHOTO
Owners of “sari-sari” stores and “carinderias” are up in arms over the impending passage of the administration’s first tax reform package, which threatens to jack up prices of soda, instant coffee and powdered juice.
The Philippine Association of Stores and Carinderia Owners (Pasco) warned that the hefty excise tax of P10 on sweetened drinks under House Bill No. 5636, or the Tax Reform for Acceleration and Inclusion, would exact a heavy toll on their sources of income.
Based on Pasco’s calculation, the price of a sachet of three-in-one instant coffee will rise to P8 from P5, while that of powdered orange juice will go up from P9 to P20, once the sugar tax is imposed.
The price of ready-to-drink juices will rise by P6, while sodas will cost P25 from P16 a bottle, the group said.
Pasco described three-in-one coffee as a “major commodity of the poorer segment of the society.”
House approval
On Wednesday evening, the House of Representatives passed the tax measure on third reading by a vote of 246-9 with one abstention. The bill will then be tackled by the Senate.
Opponents criticized the bill for being antipoor, arguing that while it would lower personal income tax, it would burden the public with corresponding new taxes levied on fuel and sugar-sweetened beverages, among others.
Pasco said the excise tax would “most likely double” the price of the most basic commodities in the market.
“I don’t understand the reason why they are taxing the products that the poor are consuming. This is but unfair,” said the group’s president, Victoria “Nanay Vicky” Aguinaldo.
“I hope our lawmakers would realize that we do not have extra income, and that we will only be burdened by this. This is just too much,” she said.
A typical sari-sari store owner earns an average of P1,000 per day and P300 to P400 of that, representing 30-40 percent of the total, comes from the sale of coffee, juice and carbonated drinks, Aguinaldo said.
So, almost half of the store owner’s net income comes from the sale of the sweetened drinks, she said.
Appeal to Duterte
“President Duterte is our only hope. We call on him to heed our call and thwart the passage of this bill,” Aguinaldo said.
Bayan Muna Rep. Carlos Isagani Zarate said any savings for professionals offered by the tax reform package would be effectively wiped out by corresponding hikes in the prices of goods.
“They gave with the left hand, but took more of it back with the right hand. It’s probably better to leave the tax system as is, because if this is the effect on a middle-class individual, the effect will be more heavily felt by the poor, because they will bear the brunt of price hikes,” he said.
“Fixed-income earners may at least have relief due to lower income taxes, but what about minimum wage earners, those in the informal sector and without source of income? They will have no benefit at all from this bill,” said ACT Teachers Rep. Antonio Tinio.
Economic advance
Siquijor Rep. Ramon Rocamora said the tax package was needed “to move the economy forward.”
“A tax measure is never easy. That is why I admire the House leadership in pushing this very difficult measure, no matter how unpopular this may be,” he said.
The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) warned the move would hit the labor sector hard.
“Around 30 million workers will become poorer,” said Alan Tanjusay, ALU-TUCP spokesperson.
“The tax measure will hit the poorest of the poor and will push inflation even higher at a faster rate. The current inflation rate is at 3.4 percent in March, the highest in four years,” Tanjusay said.
The measure will also marginalize further the informal sector workers who are earning P6,000 a month because of the imposition of excise tax on fuel, he added.
“Productivity of workers will be severely affected once they experience more poverty brought about by this tax reform package,” Tanjusay said.
“There is more reason for us to pursue our standing proposal to President Duterte to give P500 monthly cash subsidy for minimum wage workers to cope with the impending rise of prices of goods and services,” he said. —WITH A REPORT FROM TINA G. SANTOS
