Opposition lawmakers set to challenge TRAIN
The Makabayan bloc of lawmakers in the House of Representatives is set to file this week a petition questioning the legality of the tax reform law before the Supreme Court (SC).
ACT Teachers party-list Rep. Antonio Tinio said the Makabayan bloc will file a petition seeking to invalidate the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which President Duterte signed into law last month to generate revenues to fund the government’s infrastructure program.
In a news forum yesterday, Tinio said among the arguments in their petition is the “invalid ratification” of the then tax reform bill last December for lack of quorum as only 10 lawmakers were present.
“The more substantive issue is the regressive nature of this law,” he added.
Tinio pointed out that while six to seven million Filipinos will benefit from the TRAIN law because of lower income taxes, 16 million Filipinos belonging to the poor sector will suffer as a result of higher prices of food, fuel and other basic commodities.
“Is it not clear who are the winners and losers here?” Tinio said.
He said that while Makabayan bloc is counting on the objectivity of the SC justices, the public should also do their share by making the TRAIN law an electoral issue.
“The main arena for fighting the TRAIN law is not in the judiciary. The administration and legislators who inflicted TRAIN on the majority of the people should be held accountable in the election,” he said.
Higher prices of food
A farmers’ group also warned that the TRAIN law will result in increased production cost of major staples and agricultural produce.
“The additional excise tax on petroleum products will directly impact the agricultural production cost as farmers and agricultural producers use diesoline and gasoline in every process of production, from land preparation, planting, harvesting, post-harvest to transportation,” Kilusang Magbubukid ng Pilipinas (KMP) secretary-general Antonio Flores said.
“Most farm equipment used by farmers also run on gas and diesel, including deepwell for irrigation, hand tractors, threshers, drying facilities and milling,” he added.
KMP said the increased tax on fuel will result in higher production costs of agricultural products, which will instantly translate to higher prices of rice, vegetable produce, poultry, livestock and dairy products.
“Duterte’s economic managers were quick to boast that TRAIN will lower the personal income tax and increase the take home pay of employees. But what about farmers and fisherfolks who do not depend on wage and salaries but on income from production yield?” Flores pointed out.
Earlier, Trade Secretary Ramon Lopez said the impact of increased fuel taxes on consumer products is less than five centavos. But Rep. Ariel Casilao of party-list group Anakpawis said it is “fake news.”
“He should not fool the public. He is out of touch with reality. The real impact is much, much more,” Casilao said.
He noted that transport groups are petitioning for higher fares, while labor organizations are seeking a wage increase, and all these would have a more substantial effect on consumer prices than what Lopez estimated.
‘Absorb portion of fuel tax’
Oil companies were urged to absorb part of the huge tax on diesel, kerosene, liquefied petroleum gas, gasoline and other oil products to cushion the impact of the levy on consumers.
While the TRAIN law imposing the fuel tax took effect last Jan. 1, oil firms have not started collecting it as they are still exhausting old inventories, though smaller fuel importers-distributors have indicated that they would adjust their prices next week.
Rep. Michael Romero of party-list group 1-Pacman said oil refiners-importers-retailers should consider not passing the full tax on consumers.
These companies could absorb at least 10 percent of the levy, which would not seriously affect their profits, he said.
Under the TRAIN law, the tax on diesel and bunker fuel starts at P2.50 per liter this year, going up by P2 to P4.50 in 2019 and by P1.50 to P6 in 2020.
The levy on cooking gas is P1 per kilogram, increasing by another P1 to P2 in 2019 and another P1 to P3 in 2020. Thus, an 11-kilogram cylinder has a tax of P11.
The tax on kerosene starts at P3, going up by 1 to P4 in 2019 and another P1 to P5 in 2020.
There is no excise tax at present on diesel, kerosene, cooking gas and bunker fuel, which is used to produce electricity.
But existing impositions on other oil products like gasoline, asphalt, waxes, and aviation fuel also went up.
The tax on gasoline, for instance, jumped from P4.35 per liter to P7 this year and will increase to P9 in 2019 and P10 in 2020.
The imposition on coal, which is used by many electricity producers, also increased.
Electricity distributors have announced that adjustments would be reflected in next month’s billing statements.
Romero suggested that motorists and commuters could explore other transport options to cushion the impact of fuel taxes.
“Car owners could use public transportation or transport network vehicle service providers like Grab and Uber on certain days,” he said.
Romero also said the government should provide more point-to-point buses on existing routes and should create additional routes to entice motorists to use this mode of transportation.
Grab has already petitioned the Land Transportation Franchising and Regulatory Board for a fare increase on account of the new and higher fuel levies.