MANILA, Philippines – The newly-signed Tax Reform Acceleration and Inclusion (TRAIN) law will burden about 21 million poor Filipinos, the National Anti-Poverty Commission (NAPC) Chief Liza Maza said on Thursday.
“The poor don’t pay tax in the first place, so the benefits will not be given to them…At the same time, as the consumer prices of goods upsurge, they will surely be burdened,” Maza said in a forum.
The law, which took effect this year, exempts workers earning P250, 000 annually and below from paying the personal income tax. Under the law, benefits such as 13th-month pay and bonuses amounting to P90, 000 are also exempted from taxation.
However, the measure also imposes new taxes on diesel, liquefied petroleum gas, kerosene, and bunker fuel for electricity generation, and higher taxes on other oil products
Also, critics of the law said it will threaten the increases in transport fares, electricity costs, and consumer prices.
Expressing her disapproval of the law, Maza said the NAPC’s work is bound only to monitor the effect of the measure on the people living below the poverty line.
In its website, the NAPC said one of its functions is to “oversee, monitor, and recommend measures to ensure the effective formulation, implementation, and evaluation of policies, programs and resource allocations and management of social reform and poverty alleviation program.”
Critics of TRAIN earlier described the law as anti-poor as it would reportedly lead to higher prices of goods. They even threaten to question its constitutionality before the Supreme Court (SC).
In response, Trade Secretary Ramon Lopez called on detractors of the law to study it first and to be “objective and look at the numbers” for them to understand its benefits.
Lopez also said that the legislation would create a “virtuous” cycle in the economy as it would generate additional revenues that can be used to fund infrastructure projects like roads, bridges, railways, and airports.
The TRAIN law, a priority measure of the Duterte administration, is anticipated to generate P130 billion in revenues for the government.
Meanwhile, Presidential spokesperson Harry Roque said the government is ready to defend the tax reform package before the high court.