Poor to bear brunt of new tax law – Aquino

MILLIONS of poor Filipinos will bear the brunt of the tax reform program because the government is not yet ready to provide them financial assistance to help them cope with the expected surge in the prices of basic commodities in 2018, Sen. Paolo Benigno “Bam” Aquino 4th said on Wednesday.

He warned that the prices of goods and services will increase once the Tax Reform for Acceleration and Inclusion ( Train) is implemented in January 2018.

The government has promised to implement an expanded cash transfer program to cushion the impact of the law on 10 million poor families.

The finance department, Aquino said, proposed P200 monthly financial assistance on the first year and P300 per month for the second and third year to help cover the increase in prices of basic goods.

However, the Department of Finance said it cannot immediately implement the cash transfer program.

“While the government is determined to implement the tax reform program starting next year, it will take months before it rolls out the cash transfer program for poor Filipinos,” said Aquino, who rejected the tax reform bill’s approval because of the inability of government to implement the financial assistance program.

Prices of basic commodities and services are expected to increase with the implementation of the Train bill that seeks to impose higher taxes on fuels and sugar-sweetened beverages.

Under the new tax law, liquefied petroleum will be taxed at P1 by next year, P2 in 2019 and P3 in 2020.

Diesel on the other hand will be taxed P2.50 on the first year of implementation, P4.50 in 2019 and P6 in 2020, while gasoline excise tax will be raised to P7 from the current P4.35 starting 2018, P9 in 2019 and P10 in 2020.

Sugar-sweetened beverages will be taxed P6 per liter for those using caloric and non- caloric sweeteners, and P12 per liter for drinks using high fructose corn syrup (HFCS).

The law however exempts all kinds of milk, 3-in-1 coffee mixes and 100 percent fruit and vegetable juices and meal replacement drinks from the imposition of new taxes.

“In the end, poor Filipinos will bear the brunt of this tax reform program as it will increase the prices of basic commodities,” Aquino said.

Sen. Sherwin Gatchalian also reminded the government to “keep its end of the bargain” in helping poor families cope with expected price increases of essential commodities.

He said, the cash transfer program that was promised must be ready for implementation on day one of the effectivity of the tax reform law.

Senate minority floor leader Franklin Drilon meanwhile called on the administration to push for the immediate passage of legislation rationalizing the grant of fiscal incentives to business enterprises “to make our tax system more equitable.”