Train will make the rich even richer, IBON claims
Only the rich will have larger take-home pay under the newly-passed tax reform package of the Duterte administration, a militant think tank claimed Saturday.
Despite the lowering of income taxes for the lower middle class, IBON Foundation claimed “the highest earning 40 percent or about 9.1 million households, will have even more money” compared to earlier data released by the Finance Department.
In a statement, IBON said that based on its own computation, “the richest 10 percent, now estimated by the DOF [Department of Finance] to be earning an average of P104,170 monthly, will have an additional P90,793 annually.”
The poor will still bear the brunt of paying higher taxes, the think tank claimed.
“This includes how a chief executive officer among the top 0.1 percent of families already earning P494,471 monthly will take home an extra P88,568 annually. This is a reversal of the previous estimate that a CEO among the top 0.1 percent earning P706,017 would lose P20,694'', said the group.
Middle income and lower-middle families, meanwhile, take home an additional P7,880 to P24,343 under the TRAIN (Tax Reform for Acceleration and Inclusion) law, the group said.
IBON also claimed the poorest 60 percent of Filipinos, or 13.7 million households, will continue to have less money under the new tax law, though figures based on the more recent data are slightly lower than previously estimated.
“Majority of Filipinos will not benefit from income tax exemptions from TRAIN. About 15.2 million families who already do not pay income tax because they are minimum wage earners or informal sector workers with erratic incomes will not have any income tax gains,” the think tank said.
“Yet while not getting increased take home pay, they will have to endure price hikes as a direct or indirect effect of higher consumption taxes,” it added.
IBON likewise slammed the proposed cash transfers to supposedly minimize the tax impact on poor households, saying the poor will still be burdened with higher spending.
“These are only temporary and will only be given during the first three years while oil excise taxes continue to increase. The poor will no longer receive the temporary cash transfers after 2020, yet have the permanent burden of higher prices on their basic goods and services,” IBON said.