Senators say passing 'anti-poor' tax reform in full won't happen

Senators JV Ejercito and Joel Villanueva doubt that the Senate can fulfill President Rodrigo Duterte’s wish of having the proposed tax reform proposal approved “in full.”

In a text message Tuesday, Ejercito said that while he supports Duterte’s various programs like infrastructure development, he “cannot in conscience” support the tax reform package being pushed by the Department of Finance (DOF).

“This has to be carefully studied. My apprehension is that the tax reform will be inflationary and will be a direct hit to the consumers specially the masa,” Ejercito said.

“In my opinion, it is pro-government as it will raise revenues. But it seems to be anti-poor as consumers will be the ones will take the brunt of shouldering the taxes on commodities that will surely be passed on to them,” he said.

Ejercito earlier expressed opposition to the proposed lifting of value-added tax (VAT) exemption on low-cost and socialized housing, saying it will further balloon the country’s housing backlog, which is now close to five million.

The proposed tax reform measure of the Duterte administration is aiming to lower income taxes while limiting VAT exemptions, adjusting excise taxes on oil and automobiles, and imposing new taxes on sugar- sweetened beverages (SSBs).

Senator Joel Villanueva said passing the TRAIN or the Tax Reform for Acceleration and Inclusion “in full is not going to happen.” The said measure was already passed by the House of Representatives last May.

“We really need to make some modifications to improve it further and ensure it is not anti-poor,” Villanueva said in a text message.

Villanueva, for instance, questioned the cash transfer proposal for the poor sector, saying that there should be a “comprehensive social protection” instead.

“We should think of a comprehensive social protection for the low income which should include access to nutritious food. I amm proposing that we allocate the proceeds from the excise tax on sugary beverage to finance that,” he said. 

“I also want to exempt some goods like powder juice and coffee which most families consume every morning. I think these modifications will not compromise but rather improve the pro-poor vision of the bill,” Villanueva added.

The DOF is proposing a P10-per-liter excise tax on SSBs. Under the existing proposal, a one-liter bottle of soda will increase by P11 or from the current P27 to P38. Sachets of powdered drinks, such as juice and 3-in-1 coffee, is projected to increase from P9.75 to P20.75.

Socioeconomic Planning Secretary Ernesto Pernia earlier warned that the Philippines will have to endure lower economic output and the “dark age” of infrastructure if Congress will not pass the proposed tax reform program in full.

In his second state address Monday, Duterte appealed to the Senate to pass the tax reform package “in full.”

“The fate of the tax reform is now in the hands of the Senate. Ano bang gustong ninyong gawain, magluhod ako niyan? Well, really I’ll leave it up to you,” Duterte said.

The President even put on the spot some senators who, as he pointed out, were not clapping upon hearing his statement.

“Ayaw man magpakpak --- ah pati si ano wala, they are not clapping so. Si Angara ayaw rin mag-clap. Bantay ka lang sa election tingnan mo,” Duterte said, referring to Senator Sonny Angara, chairman of the Senate ways and means committee.

Angara, who is running for re-election in the 2019 polls, earlier said he considers Duterte’s remark both as a “joke” and a “threat.” —ALG, GMA News