Citing what it described as its “detrimental” effects to the people, the Makabayan bloc in the House of Representatives on Thursday filed a bill that calls for the repeal of the Duterte administration’s Tax Reform for Acceleration and Inclusion (TRAIN) law.
In House Bill 7653, the Makabayan bloc said that in the first few months of the implementation of the new tax-reform law, prices of petroleum products, basic goods and services rose.
“Rice, which is supposed to be VAT [value-added tax] exempt, became more expensive by P1 to P2 per kilo. There was a P10 increase per kilo for beef, meat and pork lean meat and P2 to P20 per kilo increase for dressed chicken,” the bloc said.
“The Department of Economic Research of the Bangko Sentral ng Pilipinas said that on April 2018 inflation may reach 4.7 percent, while the Philippine Statistics Authority [PSA] reported an inflation rate of 4.5 percent in March, higher from the revised 3.8 percent in February. Earlier, according to news reports, inflation hit successive three-year highs of 4 percent and 4.5 percent in January and February this year, coinciding with the initial implementation of the TRAIN law,” the bloc added.
The lawmakers, citing the PSA, said the tax-reform law has both direct and indirect effects on the cost of goods, with price hikes “particularly felt by the poor during the start of the year.”
“The impact of TRAIN among the poor Filipinos could never be denied. While the TRAIN law provides higher income tax exemption for those earning below P250,000 annually, it actually levies higher tax burden to the poor majority with the removal of some VAT exemptions and introduction of new excise taxes on petroleum products and sugar-sweetened beverages,” the bloc said.
Meanwhile, in the same bill, the bloc has introduced new provisions, which seek to:
Restore the old National Internal Revenue Code (NIRC) levels of excise tax on petroleum products and oil, specifically zero tax for liquefied petroleum gas (LPG), diesel, kerosene and bunker oil (Section 5);
Repeal the whole section on excise taxes on sugar-sweetened beverages (SSBs) (Section 7);
Repeal the whole section on distribution of incremental income from TRAIN (70 percent build, build, build and 30 percent on social measures) (Section 7);
Restore the personal exemption worth P50,000 and P25,000 per dependent (Section 2);
Restore the VAT exemption of sales of electricity by generation companies, transmission by any entity, and distribution companies including electric cooperatives (Section 2);
Restore the VAT exemption of low cost housing (Section 3);
Restore the 3-percent tax exemption of cooperatives, self-employed and professionals with gross receipts of P2,000,000 and below (Section 4).
Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna, for his part, said what is needed now is not just a mere review or suspension of the TRAIN law, but “TRAIN law needs to be repealed.”
“House Bill 7653 will repeal the anti-poor and anti-people provisions of the TRAIN law so as to lessen the burden of consumers, because they are the ones bearing the brunt of the TRAIN law. They don’t even feel the supposed 6.8-percent growth of the Philippine economy,” Zarate, a member of the political bloc, said.
“We hope that this bill will be fast-tracked by Congress because the economic suffering being endured by our countrymen because of the TRAIN law is very real and should be addressed the soonest time possible,” he added.
Besides Bayan Muna, members of the Makabayan bloc include ACT Teachers, Anakpawis, Kabataan and Gabriela party-lists.
President Duterte has signed into law Republic Act 10963, or TRAIN law on December 19, 2017, aiming to create a simple, fair and more efficient system that will make the rich contribute more to fund the government’s services and programs for the benefit of the poor.
The law is also expected to finance the “Build, Build, Build” program, which will modernize the country’s infrastructure backbone and is expected to create 1.7 million jobs by 2022.
