SolGen defends legality of TRAIN law

The government has defended the legality of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion Act (TRAIN Law) before the Supreme Court (SC).

In a 74-page comment filed last April 19, Solicitor General Jose Calida asked the SC to dismiss the two petitions filed last January by militant lawmakers led by Bayan Muna partylist Rep. Carlos Zarate and consumer group Laban Konsyumer Inc. (LKI) seeking to stop the implementation of the TRAIN Law.

Calida rebutted the main argument of petitioners that President Duterte signed RA 10963 into law with grave abuse of discretion simply because the House of Representatives did not have a quorum when it passed the tax measure.

Zarate and company alleged that only around 10 lawmakers, including them, were present during the ratification of the law in the House, supposedly in violation of Article VI Section 16 (2) of the 1987 Constitution and Section 75 of Rule XI of the House Rules that requires a quorum of the representatives before they can do any legislative business.

Calida told the SC that such claim is not true, citing official journals of the House during deliberations on the TRAIN Law on Dec. 13, 2017 where 232 out of a total 295 members were present.

He stressed that the journals are “conclusive evidence of what transpired during the session.”

Calida also argued that the SC cannot inquire into or review such existence of quorum in the House for the approval of the TRAIN Bill without violating the constitutional doctrine of separation of powers.

“Under the separation of powers, ‘courts may not intervene in the internal affairs of the legislature; it is not within the province of courts to direct Congress how to do its work,” he explained.

Calida stressed that petitioners erred in filing the petition for review before the SC since such special civil action cannot be invoked against exercise of legislative power of Congress.

He also argued that petitioners violated the principle of hierarchy of courts and committed a fatal mistake in not impleading Congress in the case.

With these arguments, Calida said the President correctly relied on the enrolled TRAIN Bill when he signed it into law, adding that Duterte cannot be impleaded in the case due to his immunity from suit while in office.

As to LKI’s arguments, Calida belied the group’s allegations that the TRAIN Law violated the equal protection clause and right to due process in the Constitution.

Petitioners said the new excise taxes on petroleum products and sugar-sweetened beverages, and its broader value added tax, will hit poor and low-income earners.

But Calida argued that RA 10963 does not specifically discriminate against the poor and unduly favor the rich in terms of increased taxes on goods and commodities.

“Congress’ enactment of the TRAIN Law is laden with policy considerations for the general welfare of the people. This law was meticulously studied, giving utmost consideration to the effects of its implementation to the poorest of the poor,” he said.

“In fact, the core purpose of the TRAIN Law is to eradicate extreme poverty and reduce inequality by formulating a tax reform that will utilize the government’s budget to protect the most vulnerable sectors in the society instead of merely giving tax exemptions,” he added.

Lastly, Calida asked the high court to consider the possible repercussions of the relief sought by petitioners in deciding on the case.

“The government and the public in general will greatly suffer if the TRAIN Law is declared invalid. The government stands to lose an estimated P146.6 billion in 2018 from the lowering and restructuring of personal income tax. This loss will only be offset by the revenue generating features of the TRAIN Law, which is expected to provide P89.9 billion in incremental revenues for 2018 and P786 billion within the first five years,” he added.

Repeal of TRAIN Law

Zarate lamented that administration officials continue to insist that the TRAIN Law has minimal impact on consumer prices.

“As it is, the impact of TRAIN among the poor Filipinos could not be denied. While the TRAIN Law provides income tax exemption for those earning up to P250,000 annually, it actually levies higher tax burden on the poor majority with the removal of some VAT exemptions and introduction of new excise taxes on petroleum products and sugar-sweetened beverages,” he said.

He cited a study by research group Ibon Foundation, which showed that 60 percent of Filipinos or 13.7 million families would have decreased income as a result of TRAIN, while 40 percent comprising the rich would have increased earnings.

For this reason, Bayan Muna will seek the repeal of the TRAIN Law.

Zarate said his group would file a bill repeal- ing regressive provisions of the law, while retaining the higher tax exemption for employees.

“We need not wait anymore for even more adverse effects, more price shocks, affecting especially the poor, before Congress should decisively act. What is needed now is not just to review but even to repeal the regressive provisions of the TRAIN Law,” Zarate said yesterday.

Zarate said prices of meat products like beef, chicken and pork rose by P10 to P20 per kilo, while fares for Grab vehicles already increased and those for mass transportation are about to go up.

“Hundreds of workers of Coca-Cola were laid off, prices of petroleum products rose and prices of basic goods and services followed suit. Rice, which is supposed to be value added taxexempt, became more expensive by at least P2 per kilo,” he added.