The administration of Philippine President Rodrigo Duterte maintained that the rich and the poor would “both benefit” from the newly enacted Tax Reform for Acceleration and Inclusion (TRAIN) Act.
This is in contrast to IBON Foundation’s recent claim that TRAIN is “scourge, not a gift” to Filipino people.
While admitting that the effects of exercising TRAIN include an increase in the price of some commodities, Malacañang insisted that such hikes will be “minimal” and “temporary,” and will taper off over time.
“Contrary to the claim of IBON Foundation, the rich and the poor would both benefit from the newly enacted (TRAIN Act),” Duterte’s spokesperson Harry Roque said in a statement on Thursday, January 4.
“TRAIN is often criticized for its perceived negative impact on the poor; mainly, implementing TRAIN will lead to higher prices. 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,” he added.
Based on the estimates made by the Department of Finance (DOF), the Bangko Sentral ng Pilipinas (BSP), and the National Economic and Development Authority (NEDA), Roque noted that there is only an expected of around 0.4 to 0.7 percentage point increase in inflation during the first year of implementation of TRAIN.
Apart from providing higher take-home pay to wage earners, Roque further pointed out that TRAIN would result to “more jobs, better infrastructure, and more efficient delivery of services from massive investment in infrastructure and on 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,” he explained.
In a recent statement posted on its official website, IBON Foundation accused the Duterte administration of “exaggerat[ing] how lower income taxes will benefit Filipinos, and downplayed how the country’s poorest will be burdened by higher prices on basic goods and services without getting any tax exemptions.”
IBON executive director Sonny Africa pointed out that the higher taxes imposed on sugar-sweetened drinks, oil products and gasoline, among others, will result in more expensive commodities that only worsen the burden of poor Filipinos.
“TRAIN is a scourge, not a gift, to the people,” Africa said. “Though Filipino families certainly deserve income tax cuts to cope with rising costs of living, it is misleading to claim ‘6.8 million’ benefiting from TRAIN because this figure includes millions of minimum wage earners already exempted by law.” (AJPress)