Finance chief Carlos Dominguez pushes TRAIN-2 despite people’s plea

IF, indeed,many people are saying that Finance Secretary Carlos Dominguez is out of touch with the plight of ordinary Filipinos, we can hardly blame them for their unfortunate assumption.

The public is still reeling from the effects of the first round of the Tax Reform for Acceleration and Inclusion (TRAIN) Act or TRAIN-1.

Yet, Secretary Dominguez is now pushing the second package of the TRAIN Law or TRAIN-2, as it is called. This will be an additional burden to consumers due to the foreseen escalation of power rates, among other vital household expenses.

This was pointed out by Victorio Dimaguiba, former trade undersecretary who now leads the consumer group Laban Konsyumer Inc., which strictly monitors the effects of passing the TRAIN-2 law on the lives of ordinary Filipinos.

Once the TRAIN-2 law is passed, Dimaguiba fears that incentives in the power sector, particularly the Renewable Energy Industry will be scrapped. Thus, “everything will be subjected to 12 percent value added tax.”

Another effect the TRAIN-2 law may possibly have on the Renewable Energy Industry is it would further slow down the development of clean and indigenous resources.This will only promote coal-based projects which is very harmful to the environment, though a cheap source.

Once it will be passed into law, the Filipino consumers can expect a double whammy on their daily lives on top of the TRAIN-1 law.

It will be a double whammy for Pinoysis because, while TRAIN-1 imposed lower personal income taxes and simplified transfer taxes (donor’s tax and estate tax), it further expanded the Value Added Tax and increased excise taxes on certain goods.

TRAIN-2, on the other hand, will mean additional burden on ordinary Filipinos who will have to shoulder the additional taxes to be imposed on certain products since government will lower corporate taxes.

Ibon Foundation was right in saying that TRAIN-1 was among the biggest factors driving the inflation rate and further inflationary surges which will likely happen in the next two years when the next two rounds of additional taxes on petroleum and oil products will take effect.

The price increases from TRAIN are permanent so it is not forthright for economic managers to give the impression or claim otherwise. Prices will continue to rise for the poorest of the poor from TRAIN’s new and big- ger taxes unless government will say that the inflation rate will turn negative, which is very, very unlikely.

If the government really cares for the Filipino masses — as what President Rodrigo Duterte, Secretary Dominguez, and the rest of the die-hard TRAIN pushers have always been declaring — it has to scrap TRAIN.

The government can easily do so with the flick of a finger. As finance chief, Secretary Dominguez has the power to put a stop to this additional burden to the Filipino people. It’s just he chooses not to do so.