All sectors must move forward with TRAIN

THE recently signed Tax Reform for Acceleration and Inclusion (TRAIN) Act will definitely benefit the nation’s employed workers with lower income tax payments.

Minimum wage earners and mid-level wage earners with salaries of up to P21,000 a month or P250,000 a year will be exempted from paying income tax. Higher-income officials now paying 32 percent of their income in taxes will pay only 25 percent under the new law. The “ultra rich” will pay 35 percent. This is the reform part of the law.

Because it will result in lower tax collections for the government – about P200 billion less than current collections – the government has to find other sources of income. It will now increase taxes on gasoline, diesel, and other fuel; on coal which fuels most of our electric power plants; and on sweetened beverages.

The increased tax on fuel will affect all who drive cars, but it will also affect those who deliver farm and other goods to the market. Many consumer prices are thus bound to rise. The increased tax on coal will be passed on to electric power consumers – every home and every factory. The increased tax on sweetened beverages will impact on all store owners who sell a lot of bottled drinks to ordinary folk.

The Associated Labor Union-Trade Union Congress of the Philippines (ALU-TUCP) said TRAIN will make life more difficult for some 15.6 million people who do not have regular jobs. They do not pay income taxes now, so they will not benefit from the tax rate reductions. But they pay for electricity in their homes; they buy goods in markets, which will now have higher price tags; and they consume a lot of high-sugar soft drinks

The ALU-TUCP has asked President Duterte to postpone implementation of TRAIN until the government can provide needed protection to this sector of the population – the informal sector without regular employment. But it is very unlikely that the government will heed this appeal.

We hope that the massive infrastructure program of the administration – “Build, Build, Build” – will begin providing jobs for more people very soon. And we hope that manufacturing, services, agriculture, and other sectors of the economy will also start to step up operations. TRAIN will move the country forward, but it should not leave certain groups like the informal work sector too far behind. All must move forward with it.