Gov’t ‘brushed aside’ warnings on TRAIN impact on poor, solon says

by Audrey Morallo (philstar.com), May 28, 2018

MANILA, Philippines — An opposition lawmaker on Monday slammed government officials who brushed aside warnings that government safety nets supposed to cushion the impact of the tax reform law on prices had not yet been fully rolled out.

Several lawmakers are already calling for the suspension of the oil excise tax under the government’s tax reform law, but a Finance undersecretary said that this could be done only for the next two tranches of levies and not with the first one.

Inflation reached 4.5 percent last month, pushing the year-to-date rate to 4.1 percent, which is above government estimates of between 2 to 4 percent.

Rep. Gary Alejano (Magdalo party-list) said that early warnings about the tax reform law were ignored following assurances that there were mechanisms in place to help the poor cope with higher prices of goods and services.

“However, we are seeing that safety nets are still promises while the poor are presently being battered by high prices of commodities,” Alejano said.

During a Senate hearing early this month, the Department of Social Welfare and Development said that it was able to distribute cash aid to around four million households out of the target 10 million families.

The agency said that the remaining families would receive their cash transfers in September.

During the deliberations on tax reform law, the Department of Finance gave assurances that the cash transfer program would be ready by January 1, the date when the measure would take effect.

The government was eyeing a monthly cash transfer of P200 for 2018 to help poorer families deal with the possible increases in goods and services spawned by the law’s additional taxes.

Sen. Paolo Benigno “Bam” Aquino IV has already filed a measure seeking the suspension of the petrol excise taxes should the three-month inflation average exceed official targets.
Senate President Pro Tempore Ralph Recto said that there is already a tax-freeze provision under the Tax Reform for Acceleration and Inclusion law if the benchmark price of crude oil reaches $80 per barrel.

However, Finance Undersecretary Karl Chua said that the provision could be applied only to the next two tranches of tax increases and not to the first one as the law prohibits the reduction of current excise taxes.

“No, because the law also says that at no time will there be a reduction of the current excise tax. It’s staggered over three years. We preserve the first year, and we let the next two be dictated by global developments. So that’s a safeguard,” Chua said when asked in a television interview if the suspension could be applied to the first batch of excise taxes.

Alejano said that the government should address the problems of ordinary Filipinos and stop denying that TRAIN has contributed to the rise in prices.

“If the government will keep on defending TRAIN, it will not be able to see the realities Filipino families are facing now under the Duterte tax plan,” he said.

Alejano called for a review of the law and the suspension of the deliberations on the second package of the tax reform measure that the government said was crucial in financing the government’s infrastructure and social services program.