THE Palace urged consumers to accept what it described as “minimal” and “temporary” increases in the prices of basic commodities as a result of its tax reform package, but a militant lawmaker warned that angry voters would take their revenge in the 2019 elections.
In a statement, Palace Spokesman Harry Roque admitted that prices of basic commodities will increase because of the new tax reform package, but said these would help the government better serve the poor in the long run.
“While adjusting excise taxes would raise prices of some commodities faced by consumers, we assure everyone that it will be minimal and it will be temporary,” Roque said.
Roque then cited projections by the Department of Finance, the Bangko Sentral ng Pilipinas, and the National Economic and Development Authority, that there would “only [be] around 0.4-0.7 percentage point increase in inflation during the first year of implementation with the impact tapering off over time.”
The first package of the Comprehensive Tax Reform Program will help the government address massive inequality in the country, Roque said.
“Rather than look at the short-term minimal price increases, we must view the persistent poverty and high inequality which result from the systemic inability of the poor to participate in society actively and productively. The poor are denied opportunities and are routinely excluded from access to adequate social services and infrastructure that boosts productivity,” he said.
“Much more than providing higher take home pay to wage earners, TRAIN would also mean more jobs, better infrastructure, and more efficient delivery of services from massive investment in infrastructure and in people.”
“These investments would increase the productive capacity of the economy, thereby creating more and better jobs and result in high quality education, better health services, and adequate social protection so that everyone, especially the poor, is accorded with equal economic opportunities towards prosperity.”
The President signed into law package 1A of the TRAIN on Dec. 19, 2017. This slashes and restructures personal income tax rates that stayed the same for two decades, while also jacking up or slapping new taxes on the consumption of oil, cigarettes, sugary drinks and vehicles.
ACT Teachers Party-List Rep. Antonio Tinio said the high prices would come back to bite the lawmakers who supported TRAIN in the 2019 elections.
“We have said all along that the higher prices of goods and services due to TRAIN will impose a heavier tax burden on the poor,” Tinio said.
“Going by previous experience with the expanded VAT [E-VAT] law, the Filipino electorate will get payback at the polls in 2019,” Tinio said.
Tinio was among the nine lawmakers in the House who voted against the passage on third and final reading of TRAIN as contained in House Bill 5636 in May; while 246 lawmakers voted for the measure.
Tinio said the poor will be the ones greatly affected by the TRAIN law, including a potential P12-minimum jeepney fare that some transport groups have vowed to seek.
“The impact on the middle and higher income groups will be cushioned by substantial reductions in income tax,” Tinio said.
Another party-list lawmaker urged the Department of Energy to look into the reported premature implementation of new tax on oil products even before the it claimed the new tax on oil under Republic Act (RA) 10963 or TRAIN, which will take effect in two weeks.
Anakpawis. Rep. Ariel Casilao said some gasoline stations already posted the new tax scheme effective Jan. 1, 2018.
“This is the immediate effect of the Duterte government’s TRAIN. There’s no happy in the new year as the new tax law will be implemented”, Casilao said.
He said despite the P250,000 exemption of personal income tax of 7.5 million Filipino employees, the supposed savings would mean nothing as these will be erased by new and additional tax on oil.
The Education department, meanwhile, said teacheers should get more take-home pay and allowances in 2018 once the tax reform law goes full swing.
With the new tax reform package and the 3rd tranche of the Salary Standardization Law (SSL) of 2015 in effect, a Teacher 1 (SG 11) is expected to receive a gross basic salary of P20,179 and will have a net take home pay (NTHP) of P20,012.89 (with PERA) amounting to a total net increase of 16.21 percent or P2,792.03 per month, DepEd said in a statement.
Under the 2017 tax schedule, a Teacher 1 used to have a starting basic salary of P19,620 and a take home pay of P17,220.86 (with Personnel Economic Relief Allowance or PERA).
Moreover, the annual “chalk allowance” saw an increase from P2,500 to P3,500, which is allotted for the purchase of chalks, erasers, and other classroom supplies and materials.
The clothing allowance also increased from P5,000 to P6,000, the department said.
Taxi operators meanwhile are asking for a higher flag down rate of P50 to cushion the impact of higher taxes on oil products that will result from TRAIN.
Ridesharing firm Grab is also proposing a six to 10-percent or P10 to P13 increase in fares.
The company is set to file a petition for the increase before the Land Transportation Franchising and Regulatory Board within the week, Grab Philippines country head Brian Cu said. With PNA