Labor groups on Wednesday said that President Duterte’s order to defer the collection of the second tranche of oil excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) law was “a flimsy attempt” to control its expected impacts that do not address the price shocks generated by the first tranche.
The Bukluran ng Manggagawang Pilipino (BMP) and Partido Lakas ng Masa (PLM), likewise, argued that the Chief Executive’s deferment order differs from the actual suspension of the oil excise taxes.
The President’s move, they said, “merely acknowledged without admitting, much less act on” the effects of the entire tax-reform package to ordinary Filipino families.
A priority measure of the government, TRAIN law was signed by President Duterte on December 19, 2017—two decades after the previous one was put in place.
Cuts on the personal income tax of almost 8 million employees, who earn up to P250,000 annually, have already commenced since January 1, 2018. Meanwhile, levy on sugary beverages, fuel, cars and tobacco has increased from the beginning of this year.
Both groups criticized the government’s “continued inaction” to restrain inflation as the implications of first package of the TRAIN law remains in full effect.
Under the initial tranche, excise taxes on diesel fuel are pegged at P2.50 per liter and P7 per liter for gasoline.
The government merely deferred on the P4.50 excise tax increase for diesel and P9 for gasoline under the second tranche.
“The Duterte administration remains condemnable for remaining adamant to the pleas of the majority of Filipinos living on intermittent incomes who have been adversely affected by overtaxation,” said Luke Espiritu, president of BMP.
“The sharp rise of self-rated poor families [as shown in arecent] survey should speak volumes and requires the administration’s full attention and swift action. Deferring on the excise tax collection for 2019 has no effect on the economic crunch currently besetting the poor,” he added.
The BMP also noted that the Duterte administration has exerted least effort in solving the structural injustices inflicted on the poor.
“Not only are workers burdened with overtaxation but also suffering from failed policy reforms or the lack of it. Contractualization remains to be in full swing three years into Duterte’s term, the massive budget cuts on social services and with the inflation rates hitting 6.7 percent last month, purchasing power of workers have obviously weakened immensely,” Espiritu said.
While economic managers deny the effect of the TRAIN law’s contribution to inflation, PLM Chairman Sonny Melencio encouraged them to go beyond their statistics and projections.
He urged them to admit that they overlooked the impact of the US-China trade wars, the price hike of petroleum in the global market and the struggling foreign-exchange rates that makes imports more expensive, all of which, he said, contribute to spiraling inflation.
Melencio called for the immediate scrapping of the TRAIN law to address the budgetary constraints of Filipino families.