Government lawyers on Tuesday told the Supreme Court that a P200 monthly financial assistance for poor families would be enough to mitigate whatever “minimal” adverse effects the Tax Reform for Acceleration and Inclusion (TRAIN) Act would have on ordinary people.
In its 74-page consolidated comment on anti-TRAIN petitions, the Office of the Solicitor General (OSG), through Solicitor General Jose Calida, said that, while the TRAIN Law imposed higher excise taxes on oil, coal, sugary drinks, cigarettes and vehicles and a minimal increase in electricity rates, its effect on ordinary people would be minimal.
He said rice and fish prices would also not be affected by the oil price increase due to the implementation of the law.
According to Calida, the law has shielded ordinary people from any possible adverse effects.
For one, he said minimum wage earners were already exempt from personal income tax.
“The increase in take-home pay will more than compensate for the price increase of commodities,” the government’s primary law office said.
It added that the law had also provided a three-year unconditional cash transfer to the “poorest of the poor.”
He said the assistance would be on top of the current 4Ps program of the Department of Social Welfare and Development (DSWD).
Under Section 81 of the TRAIN Act, beneficiaries will receive P200 per month for the first year and will then get P300 for the second and third year.
“Thus, for the poorest 50 percent of households with little income or are already tax exempt, the cash transfers of P2,400 for the first year of the implementation of the TRAIN law and P3,600 for the subsequent two years ensure that additional expenses of the poorest households will be offset,” the OSG said.
“[The] petitioners’ opinion that the TRAIN law will unduly burden the poor is inaccurate,” the comment added.
The state lawyers added that the Department of Finance previously declared that it was expecting “a temporary and muted inflation impact” purportedly at “an additional inflation maximum of 0.4% for 2018.”
However, the Philippine Statistics Authority reported last month that the average price increase of basic goods had already skyrocketed to 4.3 percent in March, much faster that the inflation rate of 3.1 percent during the same period last year.
“To reiterate, the TRAIN law is not arbitrary, oppressive, and confiscatory, and does not result in the deprivation of life, liberty or property without due process of law,” the OSG insisted. Thus, the TRAIN law is progressive and equitable.”
The TRAIN law, which is the centerpiece of the Duterte administration’s effort to reform taxation and earn additional revenues, promises lower personal income tax rates and increase excise taxes on petroleum products, automobiles, sugar-sweetened beverages and tobacco.
It took effect last Jan. 1. /atm