RESIDENTS of Quezon City are hoping the passage of Tax Reform for Acceleration and Inclusion (TRAIN) will bring about the electoral promises of the Duterte administration, particularly the improvement and wider coverage of Pantawid Pamilyang Pilipino Program (4Ps), better health services, and better take-home pay for minimum-wage earners by lowering their personal income tax (PIN).
Groups such as BAYAN are criticizing the measure, particularly the fuel-tax adjustment and the removal of exemptions in Value added tax, which they say are anti-poor.
The Department of Finance and other civil-society organizations (CSO) supporting the reforms, however, said simply lowering the PIN without raising revenue from other sources is irresponsible and anti-poor, as funds are needed to finance the programs of the government needed to address poverty.
“The lowering of the personal income-tax rate is welcome, but the revenue loss arising from the lower income tax has to be offset by other tax measures. The tax reform is quite progressive, given that taxes on fuel and auto will be shouldered by the rich and the spending will benefit the poor, in terms of the cash transfers and expanded economic and social services,” said Joy Chavez, coordinator of Action for Economic Reforms (AER’s) Industrial Policy team.
AER is one of few CSOs that supported the measure early on, saying the tax reform is long overdue, as the current tax regimes allow for tax evasions by big companies and even by wealthy individuals to the detriment of social spending.
Lourdes Asidera, 76, a resident of Lupang Pangako, Phase IV, Barangay Payatas B, Quezon City, is a beneficiary of the government’s 4Ps and has been receiving the conditional cash transfer of P500 a month for two years now.
She lives with her 80-year-old husband, and is taking care of her 10-year-old granddaughter Rocelyn. Rocelyn herself is a 4Ps beneficiary, and receives P300 monthly for the entire school calendar.
Aling Lourdes said the P300 is used by her granddaughter for her daily transportation to school and food allowance. Of course, the minimal amount is far from enough, as it can only cover up to eight days of her apo’s expenses which consist of P16 for tricycle back and forth and the remaining P14 for snack during school recess. To ensure that Rocelyn stays in school beyond what the cash transfer can provide, her mother works as a household help for P3,000 a month, while her father’s salary as a house painter in a construction company provides for their food and house rental.
Aling Lourdes said Rocelyn cannot expect more from her father because he has to send a portion of his menial salary to his own elderly parents in Zamboanga. Hence, she wishes the cash transfer continues and, if possible be made bigger to ensure Rocelyn stays in school, along with many other children whom she describes as “mas hikahos pa sa amin” [worse than our situation] . She said Rocelyn is lucky for having parents who are both hard working. She admitted though their combined wages are too small, primarily a result of not having higher educational attainment.
As for her own benefit, she uses her P500 monthly to buy their monthly rice consumption, while the expenses for other food and medicines and the monthly bills for water and electricity is shou ldered by her husband, who is receiving P4,000 monthly from Social Security pension from many years of working in a Chinese-owned hardware store.
A 40-year-old son recently fired from a construction company lives with them, with two other grandchildren from another son, who is working as a truck driver and rarely visits his children.
Asked if she is aware of the government’s efforts to raise funds for its social services by reforming taxation through the TRAIN to remove the burden from wage-salary earners and pass it on primarily to the well-to-do by taxing additionally oil and oil products and including sweetened drinks, Aling Lourdes said she regularly watches television news and listens to radio programs, and she’s been hearing radio programs tackling the tax reform.