Two senators have called for the suspension of the tax reform law, citing its adverse effects on the consumers.
Senator Bam Aquino for one urged the government to put the welfare of poor Filipinos first, instead of letting them become collateral damage of the Tax Reform for Acceleration and Inclusion Law.
Senator JV Ejercito for his part urged the administration’s economic managers to take another look at the law and rein in the rising prices of basic commodities.
“While infrastructure projects are important, let us not allow our poor counrymen suffer,” said Aquino, one of four senators who voted against the ratification of TRAIN.
Aquino rejected the Department of Finance’s claim that funds for free college education and salary increase of uniformed personnel will be affected if the TRAIN Act is suspended.
The government should balance statistics with the welfare of Filipino families carrying the burden of high prices of goods and services due to the TRAIN Law, he said.
Aquino said the DoF’s pronouncement was baseless since the government has an unobligated appropriations amounting to P390 billion in the 2017 national budget.
Aquino recently filed a measure seeking to suspend the TRAIN Law, particularly the excise tax on fuel, once inflation rate breaches the prescribed “target range.”
In Aquino’s Senate Bill No. 1798, the excise tax on fuel under TRAIN was to be suspended when the average inflation rate surpassed the annual inflation target over a three-month period.
During the TRAIN’s deliberation, senators approved Aquino’s amendment to include a safeguard where the implementation of TRAIN Law was to be stopped once inflation rate breached the “target range.”
However, the provision was not included in the bicameral conference committee and the approved version of the measure.
Senator JV Ejercito has called on the government economic managers to suspend TRAIN to arrest the rising inflation rate.
Ejercito made the call after media reported that the headline inflation rate accelerated to 4.5 percent year-on-year in April, which was the fastest in more than five years. The full-year target is 2 to 4 percent.
“It might be wise to consider suspension of the TRAIN law if the trend continues to breach the inflation threshold,” Ejercito said.
Ejercito was already alarmed when the March inflation rate reached 4.3 percent, from the revised 3.8 percent in February.
“The economic managers should seriously review the TRAIN law given the upward trend of the numbers. They should assess whether the increase in inflation is still manageable. Otherwise, implementation of TRAIN should be suspended and re-studied,” he said.
During the Senate deliberation of the TRAIN, both the Department of Finance and the National Economic Development Authority had claimed that the measure would likely raise the inflation level by (just) 0.7 percent this year.