The chair of the powerful ways and means committee of the House of Representatives is opposing calls to suspend the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, saying a review of its effects should come first.
Rep. Dakila Carlo Cua told reporters it would be “irresponsible” to suspend the TRAIN law outright because of its “economic implications.”
Review first
“I think we should be reviewing first, and not be drastic about suspending it,” he said.
“There will be a problem with our coffers, so it’s very irresponsible to do that,” he added.
But Cua said he would be open to a study of the TRAIN law’s effects on the country’s rising inflation — or the overall increase in price levels — citing the need to discuss “the health of the economy.”
Burden on the poor
Senators Bam Aquino and JV Ejercito have called for a suspension of the enforcement of the TRAIN law, as the poor have borne the impact of a spike in consumer prices brought by increases in taxes on some consumer goods.
The Makabayan bloc filed House Bill No. 7653 seeking to repeal the TRAIN law’s increase of fuel taxes and restore lower levels and also repeal excise taxes on sweetened beverages.
The TRAIN law, which took effect on Jan. 1, imposed an additional P3 tax for every liter of kerosene, a P2.50 tax for every liter of diesel and bunker fuel oil, and a P1 tax for every kilogram of liquefied petroleum gas.
The inflation rate for the first four months of 2018 averaged 4.1 percent, breaching the government’s 2- to 4-percent target range.
April’s inflation rate of 4.5 percent was the fastest in over five years.
They know their job
Amid these calls to assess the TRAIN law’s effect on the poor, Cua said he was “confident in our economic managers that they know what they’re doing.”
He noted that the Monetary Board had started shifting monetary policy and raised key interest rates for the first time since 2014 to stabilize prices.
Other factors
Cua echoed the administration’s economic managers in saying that rising inflation could be caused by other factors such as the dollar exchange rate and the increase in the prices of some commodities.
He also insisted that the TRAIN law provided for safeguards, such as a provision suspending the incremental increase of excise taxes on fuel products should the average price of Dubai crude oil breach $80 per barrel.