Duterte snubs progressives’ call to veto tax hikes
Even up to the last minute, opponents of the tax reform measure in the House of Representatives have called on President Duterte to veto the bill that would increase the prices of consumer goods and energy sources, to no avail.
“If he is really pursuing the interest of the ordinary people, there is still time for him to veto this TRAIN,” reiterated Bayan Muna Rep. Carlos Isagani Zarate reiterated in aTuesday briefing, hours before Mr. Duterte signed the Tax Reform for Acceleration and Inclusion (TRAIN) bill.
While TRAIN would increase the take-home pay of middle-class workers due to the overhauling of income tax brackets, ACT Teachers Party-list Rep. Antonio Tinio said this would be offset by increased prices that would only burden the poor.
“The problem is it’s compensating [by taking] from the poor. It may have benefits at the start, but it will burden the majority even more,” Tinio said.
Most of the poor in the informal labor sector already enjoy tax exemption, said Gabriela Women’s Party in a separate statement.
This means they would be burdened by the increased tax on consumer goods without gaining from the income tax rate adjustments touted by the Duterte administration.
“Over six million Filipino women who belong to the self-employed and unpaid family workers will never benefit from the much hyped income tax adjustments under TRAIN but will be slapped with higher prices of basic commodities and services,” said Rep. Emmi de Jesus, citing Philippine Statistics Authority figures.
“Higher taxes on petroleum products, most sugar-based beverages, and other goods and services will be imposed across the board and will largely be shouldered by women who must budget meager family incomes to keep up with rising expenses,” she added.
Rep. Arlene Brosas said around 70 percent of additional government revenue from TRAIN will be used to finance Build, Build, Build (BBB) projects and construction of military infrastructure.
“Most of what will be squeezed out of the pockets of poor women and the people will be used to bankroll BBB will bulldoze poor communities and for military infrastructure which may lead to increased displacement of families due to militarization,” Rep. Brosas said.
“The 30-percent allotment from TRAIN revenues for education and other social benefit programs is just an icing on top of a very bad tax policy that hurts women and the poor most,” she added.
An administration ally, Bagong Henerasyon Party-list Rep. Bernadette Herrera-Dy, meanwhile, dismissed the concerns about the tax reform bill’s effects on ordinary consumers as mere “bashing.”
“There will be no price shocks in the future as a result of the TRAIN,” she said, adding that the increase in prices as a result of the taxes would be “affordable.” Her press statement did not include numbers to back up her assertion.
“There might just be affordable uptick in basic prices for the short term but for the long term can be equated by higher inclusive growth for the Filipinos,” Herrera-Dy said.
“A middle uptick for prices of non-essential goods but this may lead to correction of inflation, a higher price uptick for luxury goods but the people affected are projected to be well enough to afford them,” she added.
Kabayan Party-list Rep. Ron Salo, meanwhile, zeroed in on the increased disposable income by workers who stand to gain from the higher tax-exempt threshold and rate adjustments.
“Filipinos will feel the reality of financial and economic comfort millions of Filipinos will feel next year, starting with more cash in their hands, pockets, and wallets because of the simplified and updated personal income tax,” he said.
The bill will impose a tax of P2.50 per liter on diesel, P1 per liter on liquefied petroleum gas and P7 per liter on regular gasoline in 2018, which would be gradually increased to P6, P3 and P10 by 2020. The excise tax on coal would be P50 per metric ton in 2018 and P150 by 2020.
It will also impose a tax of P6 per liter on drinks using artificial sweeteners and P12 per liter on drinks using high-fructose corn syrup, with milk, instant coffee and natural juice listed as exemptions.
This “package 1” of tax reforms is expected to generate P130 billion. Lawmakers plan to look into the repeal of various tax incentives for “package 2” in 2018. /lzv
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