Budget Secretary Benjamin Diokno (Malacañang file photo)
Suspending the Tax Reform for Acceleration and Inclusion (TRAIN) law would have a “minimal impact” on mitigating inflation, the government’s economic managers said on Tuesday, as inflation hits five-year high of 4.6 percent in May.
“Suspending TRAIN and adopting other band-aid solutions will only have a minimal and short-term impact on inflation and will stifle our growth, further delaying our nation’s progress toward becoming an upper-middle-income country by 2019, such that around six million Filipinos would be lifted out of poverty by 2022,” the Duterte administration’s economic managers said in a statement read by Budget Secretary Benjamin Diokno.
“We must keep in mind that TRAIN reformed a previously unfair and harsh tax regime. It lowered the personal income taxes of most Filipinos except the very rich—increasing the take home pay of 99 percent of income tax payers,” the joint statement read.
Aside from Diokno, Economic Secretary Ernesto Pernia and Finance Secretary Carlos Dominguez are also part of the government’s economic team.
The economic managers said the effect of excise taxes on petroleum, sweetened beverages, and tobacco under the TRAIN law, remains at 0.4 percentage points.
“That amounts to 9 centavos for every additional peso due to inflation,” they said.
“We know that we are going through a challenging period. The government is closely monitoring and taking steps to address the difficulties experienced by Filipino families today arising from higher prices,” they added.
The officials insisted that TRAIN was vital for the government’s ambitious “Build, Build, Build Program.”
“We must bridge the infrastructure gap that has painfully made our country lag behind our ASEAN neighbors,” they said. “Through this program, we seek to create more than one million jobs for our fellow Filipinos through 2022, while reducing logistics costs for businesses, especially micro, small, and medium enterprises (MSMEs), many of which are located in the provinces.”
The economic managers reiterated “the government’s unwavering commitment to improve the lives of the Filipino people and bring lasting change to our country.”
“The administration is steadfast in the conviction that we can build a prosperous, high-income economy with a predominantly middle-class society by 2040,” they said. /jpv
READ: Inflation hits fresh over 5-year-high of 4.6% in May