IBON head hits gov’t for ‘downplaying’ TRAIN law’s impact on prices

The head of think tank IBON Foundation on Saturday hit the government for “downplaying” the possible effects of the newly-implemented tax reform law on the prices of basic commodities.

At a news forum in Quezon City, IBON Foundation executive director Sonny Africa said the Department of Finance’s (DOF) statement that six to seven million Filipinos will benefit from income tax exemption was “very deceitful.”

Africa said the poorest families who do not enjoy this purported benefit will be paying higher indirect consumption taxes due to higher-priced goods and services.

“Hindi dapat nila sinasabi na minimal o negligible o wala ‘yung epekto ng TRAIN (Tax Reform for Acceleration and Inclusion) sa presyo ng bilihin,” he said at the forum, citing the supposed hikes in inflation rates and commodity prices that followed oil tax adjustment in 1996 and the expansion of value-added tax in 2005.

“It doesn’t make sense, ‘wala tong epekto,’ ibig sabihin walang kikitain ang gobyerno? So I think it’s self-contradictory for the DOF to say na walang epekto ‘to, kasi if they really want to generate revenues, it comes from somewhere,” he told reporters.

“Revenues don’t fall from the sky. They come from somewhere, they come from people’s pockets,” he added.

He also called for the DOF's transparency, which he said has not updated its estimates for the price impacts of the tax reform law.

Under the TRAIN law, diesel gets an excise tax of P2.50 per liter from zero. Gasoline, meanwhile, will see an increase of excise tax of P7 per liter from P4.35 in the first year of the law’s implementation alone.

Finance Secretary Carlos Dominguez III had downplayed the inflationary impact of the TRAIN law.

The Department of Trade and Industry, for its part, said the law will have “minimal effects” on the prices of prime commodities.

But Africa claimed the tax reform law was a way to avoid taxing the rich at the expense of the poor.

“Sa pag-iwas talaga na taasan ang direct taxes on the rich, ang ginagawa niya, ang pampuno niya, indirect consumption taxes of the majority, which is very unfair,” he said.

House Deputy Speaker Fredenil Castro, who was also at the forum, said it may be too early to judge the tax reform law, a much-touted achievement of the Duterte administration.

“Palagay ko'y hindi fair na kailangang husgahan na natin itong TRAIN sapagkat ilang araw pa lang naman itong naging effective sa ating bansa,” he said.

He said the law’s implementation has a “give and take.”

"May ibibigay na kabutihan ang batas na ito at meron din itong tama sa ating mga mamamayan na ayon sa iba ay magpapahirap sa kanila,” he said.

He cited increased excise tax on sweetened beverages, a TRAIN provision, as also being a health measure, as it would, in theory, deter people from consuming sugary drinks. —ALG, GMA News