spot_img
27.8 C
Philippines
Friday, March 29, 2024

TRAIN to drive workers even poorer—senator

- Advertisement -

WARNING that the proposed Tax Reform for Acceleration and Inclusion Act could render 1.7-million “near poor” wage earners poorer, Akbayan Senator Risa Hontiveros called on the government to lower the Value Added Tax from 12 to 10 percent.

Hontiveros said that using the Department of Finance’s own “micro-simulation methodology,” while poverty will be marginally reduced as a result of the P200 per month income transfer as provided by TRAIN, 1,796,730  wage earners will also become even poorer. 

“Due to the said households’ families’ bigger size compared to the DoF’s assumed typical household size in its computations or even compared to its sample of five thousand households in each income grade, and because the National Housing Targeting System methodology is unable to identify 13 percent of the poor, millions of near poor people risk becoming poorer,” Hontiveros explained. 

The Senator urged the Finance department to use the entire set of 50 thousand households interviewed in the 2015 Family Income Expenditure Survey – Labor Force Survey and compute the combined tax and income transfer effect for each of these households.

She also said that the monthly transfers need to be made available for a longer period of time corresponding to the phased implementation of fuel excise tax increases. 

- Advertisement -

She proposed to reduced the country’s VAT from 12 percent to 10 percent, and then to eight percent to align it with the Association of South East Asian Nations, once VAT revenues reach 4.2 percent of Gross Domestic Product, which she said is what Thailand is able to collect with a seven-percent VAT rate.

“Taxation is not bad per se as long as it benefits the majority of the people. Any proposed taxation that takes a larger percentage of income from low-income earners than from high-income earners is unjust and discriminatory,” Hontiveros said. 

Hontiveros said that she will propose the necessary amendments to the proposed tax law to make it more responsive to the interests of poor Filipino families.

- Advertisement -

LATEST NEWS

Popular Articles