Communications Secretary Martin Andanar said the newly-signed TRAIN would lead to higher commodity prices but would result in higher government revenues.
“The prices of commodities will increase but don’t they realize that because of TRAIN, the revenue collection of our government will also increase, and that means we will have more funds for programs,” Andanar said in a radio interview over the weekend.
Andanar said that would be a good thing since there would be more money to spend and more jobs to be created.
“Yes, for the big infrastructure projects of the government like highways, footbridges, subways, everything”•including airports,” Andanar said.
“So if many projects would be implemented in 2018, more jobs would be created. With more jobs, people would have higher spending power, the economy will thrive.”
While Filipinos will get a higher take-home pay, that will just be spent on more expensive fuel and other products, critics of the new tax-reform law say.
Recently, Duterte vetoed five provisions of Republic Act 10963, or the Tax Reform for Acceleration and Inclusion law, the first phase of his administration’s comprehensive tax reform package.
With the veto, government revenues should be closer to P90 billion in the first year of TRAIN instead of the projected P82.3 billion, Finance Secretary Carlos Dominguez said.
Under the new law, Filipinos earning P21,000 and below would be exempt from paying income tax starting Jan. 1, 2018.
Higher excise taxes, however, would be imposed on fuel, sugar-sweetened beverages, coal and cars, which critics say will consequently raise the cost of other commodities and transportation.