Pardon me if I discuss a topic outside of the squatters’ issue, as mentioned in my previous column. But I find the issue on the Tax Reform for Acceleration and Inclusion (TRAIN) Law and its impact on Filipinos more important to discuss in my column for this issue of the BusinessMirror for its timeliness and effect on the lives of Filipinos.
Taxing water?
It’s here and it’s happening now. The anxieties on how the TRAIN Law would affect the lives of Filipinos have started to settle. And while I understand the importance of TRAIN for the government’s economic agenda, let me share some of my observations and suggestions on the new law.
Soda drinkers are among those to feel the impact of the new excise tax on sugar sweetened beverages (SSB) under TRAIN. With the new tax, consumers now have to pay P6 more for every liter of their favorite soda or other SSBs.
However, according to my co-host in our weekly radio program Dito sa Bayan ni Juan Senator Juan Ponce Enrile, since the basis in computing for the rate of tax on SSB is volume and not on sugar content, it is in effect taxing water. And that being the case, is the new tax on SSB not curtailing one of our inherent rights to unfettered access to basic needs like water?
Depriving the elderly of a healthy lifestyle
Although it’s a lifestyle issue, some lawmakers believe that sugar intake is linked to being one of the causes of obesity, diabetes and heart disease. A compelling issue for our legislators to tax beverages that contain naturally derived caloric sweeteners like table sugar, if only to reduce the risk of such health issues. I am, however, perplexed why the non-caloric or sugar-free beverages are also being taxed under TRAIN.
Why are the elderly, consumers who mostly drink non-caloric beverages for health reasons, being burdened for trying to live a healthy life with the new tax on their non-caloric or sugar-free beverages?
Is it not inconsistent that, while the government is helping the elderly with their health concerns by exempting them from the value added tax (VAT) and providing them 20% discount on their medicine purchases, they are at the same time being deprived of their non-caloric or sugar-free beverages to keep them fit at their age, with the new tax on SSB?
This is, perhaps, one provision of the TRAIN Law our legislators should take a second look at, not only for its inconsistency with the purpose of the law, but, more importantly, for the risks it pose on the affected elderly. After all, are the elderly not entitled to their right to equal protection of the law?
The fuel tax
Among the tax components that affect the entire Filipino nation every time it moves is the tax on fuel, especially diesel fuel. The new tax on diesel, the fuel oil used to run some power plants, ships, public transport and more, is projected to raise billions of pesos in added revenues for the government.
But there is a law that could help cushion the impact of TRAIN on consumers. The law requires all fuel companies to mix their diesel fuel with up to five percent biodiesel, the specifications of which are virtually tailored fit for biodiesel derived from coconut.
However, if the Department of Energy (DOE) will officially allow fuel companies to use palm oil as a raw material for biodiesel, this could help reduce the cost of diesel fuel. Weeks ago, the price of coconut in the world market reached $1,500 per metric ton. While during the same period, the price of palm oil, also in the world market, was only $700.
Therefore, should the DOE allow the use of palm oil as raw material for producing biodiesel, which in turn would be mixed with diesel, this could translate into lower pump prices of diesel fuel. And should this happen, both the consumers and coconut producers will be happy. Consumers will be glad as it will lower the cost of diesel fuel, while coconut producers will also be happy, because they can sell their coconut oil instead, in the more profitable world market.
And most importantly, by allowing the use of palm oil as raw material for producing biodiesel by the DOE, this could help prevent the clandestine use of palm oil in biodiesel and passing it as coconut derived biodiesel. But, anyway, the ball is now in the hands of the Energy Department.