DTI chief to critics: Be more objective on TRAIN

Trade Secretary Ramon Lopez has urged critics of the newly enacted Tax Reform for Acceleration and Inclusion (TRAIN) Act to be “objective” and study it first so that they would understand its benefits, following claims that the measure was anti-poor because it would lead to higher consumer prices.

Critics have also threatened to challenge its legality before the Supreme Court (SC).

“Those kinds of remarks, I would say rhetoric, are always used even if they are baseless. If the provisions of the TRAIN are studied... if we are reasonable, we would understand its benefits. We just have to be objective and look at the numbers,” Lopez told staterun radio station dzRB last Saturday.

Lopez said the TRAIN law would pave the way to a “virtuous cycle” because it would generate additional revenues that can fund infrastructure projects like roads, bridges, railways and airports.

“If we have infrastructure, production costs would be lower and there would be more investments because they will be encouraged,” he said.

The Duterte administration is unfazed by the opposition’s plan to question the tax reform law before the SC, also describing their claims as baseless and insisting that the measure would create a “virtuous” cycle in the economy.

Presidential spokesman Harry Roque said the administration is prepared to defend

the TRAIN law before the high court.

“Taxation is one of three inherent powers of a state. Hence, it enjoys overwhelming presumption of constitutionality. We can defend it in court,” Roque said in a text message yesterday.

The TRAIN law, the first package of the Duterte administration’s tax reform program, is seen to generate P120 billion in additional revenues. It exempts those earning an annual taxable income of P250,000 and below from paying the personal income tax and raised the tax exemption for 13th month pay and other bonuses to P90,000. Officials said the provision on income tax would benefit 99 percent of income taxpayers.

But the law also imposes new taxes on diesel, liquefied petroleum gas, kerosene and bunker fuel for electricity generation and higher taxes on other oil products.

Opponents of the new tax law fear that the adjustments on fuel will lead to drastic increases in transport fares, electricity costs and consumer prices.

The Makabayan bloc of lawmakers at the House of Representatives has announced a plan to question the legality of the TRAIN law before the SC this week.

Alliance of Concerned Teachers party-list Rep. Antonio Tinio said the ratification of the TRAIN law last month was invalid because of the lack of quorum. He also claimed that the law would cause sufferings to 16 million poor Filipinos who would be burdened by higher commodity prices.

Despite the criticisms, Lopez insisted that the law was “pro-poor.”

“The reforms will bring a very positive cycle in the economy because our countrymen will enjoy a higher take-home pay. They have more money to spend and this will benefit the economy,” Lopez said.

“This is pro-poor because minimum wage earners now have extra income. They have bigger take-home pay,” he added.

The economic team is expected to submit the second package of the tax reform program to Congress this month. The second package will contain provisions on corporate income tax.