Part Two
WHILE some government officials are fast-tracking the course of the Tax Reform for Acceleration and Inclusion (Train) bill, some are wary of its final destination.
While government officials boast the Train bill would cascade positive changes on people’s lives some say the proposed tax-reform law runs on track to perdition.
So Louie C. Montemar believes.
“[The Train] impacts most of the basic consumers who are already taxed income-wise and then you have value-added tax also. And now you are adding another one,” Montemar, coconvenor of consumer group Bantay Konsyumer, Kuryente, Kalsada (BK3), told the BusinessMirror.
“It’s like the government is doing some magic: On one hand they are offering free education, but on the other hand babawiin nila sa ibang paraan [take it back through other means],” Montemar added.
Confusing
MONTEMAR, a political-science professor, argues the Train bill runs contrarian to the government’s goal of a tax system that’s easier to administer.
“If the government is saying [it] wants a simplified tax system, then we also want that, too. Who doesn’t want that?” he said. “But if you add many kinds and layers of taxes it will confuse the people. To simplify it, we want this excise tax on sugar-sweetened beverages [SSBs] to be removed as much as possible. Let’s just scrap this proposal,” he added. Industry stakeholders estimate a Train law would lead to higher prices in products with a wide consumer base.
Once the proposed additional tax is applied, a 3-in-1 coffee sachet, currently priced at P5, will be P8; a 1-liter bottle of juice concentrate, currently priced at P9, will have a retail price of P30; a 1-liter bottle of tea, currently priced at P20, will be sold at P30; and carbonated drinks and tetra-pack of ready-to-drink juice, currently being sold for P15 per liter, will cost P25.
The products covered by the TRAIN, or House Bill 5636, will include all sweetened-juice drinks, sweetened tea, sweetened coffee, all carbonated beverages with sugar, including those with caloric and noncaloric sweeteners, flavored water, energy drinks, sports drinks, powdered drinks not classified as milk, juice, tea and coffee, cereal and grain beverages and even nonalcoholic beverages with sugar.
Burdensome
THE official pointed out that the brunt of the price increase in the above-mentioned commodities will be shouldered by the Filipinos in the lower classes of the society.
“Let’s take the very important item being consumed by most of poor Filipinos, which is 3-in-1. This is the only thing that our poor drink to survive the day,” Montemar said. “I have worked with urban-poor families, and some of them sinasabaw lang nila ito [3-in-1] sa kanin at iyon na ang ulam nila [They mix the water-diluted 3-in-1 beverage with rice for viand].”
“And now you want to increase these commodities; then that’s really burdensome to the ordinary people,” he added.
Montemar said the price increments would result in lower demand for these commodities, thus, affecting those selling them.
“This is not good. It’s not a good sign that this government is taking care of consumers,” he said.
Members of the Philippine Association of Stores and Carinderia Owners (Pasco) echoed BK3’s position, adding the proposed tax measure would cause them to lose more than half of what they earn daily.
“What would be taxed would be products that form the lifeline of microretailers,” Pasco President Victoria Aguinaldo told the BusinessMirror.
According to Aguinaldo, the increase in the prices of these products would lead to fewer buyers and, hence, lower sales, lower earnings and inability to buy products for sale at the microretailer level.
She said a 3-in-1 powdered beverage needs only hot water, which a poor family can cheaply produce. A P3-increase in the price of the powdered beverage would be burdensome for people like them who profit from selling these products.
Revenue
GOVERNMENT officials pushing for the enactment of Train into law pointed out that passing the excise tax on SSBs would generate at least P47 billion.
However, Aguinaldo believes the state should not generate this amount at the expense of poor Filipinos: “Huwag din po sana sa mahihirap kunin yung perang gusto nilang maabot.”
She said Pasco and its members, composed of 6,000 sari-sari store owners nationwide, are willing to compromise with the government to ease the effects of the proposed tax measure. The Pasco chief added they could endure only an excise tax of P0.50 cents and as much as P1 on SSBs. Aguinaldo said the amount are the only ones their members can afford to pass on to their customers.
“Iyon po ang kaya namin siguro. Kasi kung hindi po mapipigilan ang sampung piso, maraming magsasarang tindahan [Those are the price levels we can afford. But if the P10 tax couldn’t be avoided, let us brace for closure of many store],” she said.
“Kailangan din namin tumulong sa gobyerno pero dito sa pagtaas na ito at mayroon pa po sa fuel na pagtaas, mahihirapan na po talaga kami [We also need to help government but with this increase and an additional increase in fuel prices, it would be difficult for us],” she added.
Aguinaldo is cognizant the proposed excise tax on SSBs is something just being passed on within the market value chain. “Manufacturer naman po magdadala at ipapasa sa amin ang produkto. Kaya naman po sa consumer din babagsak,” she said. “Sana isaalang-alang dito ‘yung mga pamilyang nakasasalay sa tindahang maliliit [It would be manufacturers who will pass on the products to us and eventually to consumers. We just hope government would give consideration to families relying on small stores].”
Reduce
MEMBERS of the Philippine Sugar Millers Association (PSMA) are appealing to lawmakers to reduce the excise tax proposed to be imposed on locally produced sugar in sweetened beverages to P5 to minimize its detrimental effects to the industry.
“The P10 should be lowered to P5,” PSMA Executive Director Francisco D. Varua told the BusinessMirror. “Because at P10 we are going to lose a big market; the ordinary consumers may not be able to buy our products anymore because they will find it expensive. People will just be drinking coffee or tea without the sugar anymore because of the high price of sugar.”
Varua’s remark comes as the Duterte administration’s Train bill has reached its next station: the Senate Committee on Ways and Means (CWM).
However, Varua said lawmakers should maintain the P20 tax on imported high-fructose corn syrup (HFCS) so as to avoid aggravating the effects of the tax on sugar on the local industry and for its negative effects on human health. “At the same time, we would like the tax of P20 on HFCS to be maintained; not only to support the sugar industry but also for health reasons.” To be concluded
Image credits: Nonie Reyes