Experts say new tax law to cause slight increase in prices

Tax experts from the Bureau of Internal Revenue (BIR) and the Department of Finance (DOF) have allayed fears expressed by consumers that prices of goods and services would sharply increase when the proposed Tax Reform for Acceleration and Inclusion (TRAIN) becomes a law.

Addressing the recent forum on TRAIN in Quezon City, the tax officials admitted that the proposed measure would result in the upward adjustment of prices of commodities, “but not much.”

To illustrate, Finance Assistant Secretary Teresa Habitan said the retail prices of four-door cars like Toyota Vios would increase by only 110,000 per unit.

She said the higher tax rate would only be applicable to luxury and high-end sports utility vehicles, citing the additional excise tax rate of almost 11 million for Toyota Land Cruiser which is currently retailed at more than 14 million.

Other revenue officials said that slight increase in the prices of commodities and services would be offset or compensated by the TRAIN’s generous tax exemption grant to wage earners wherein the first 1250,000 annual income would be excluded from the tax coverage.

Revenue Deputy Commissioner Nestor S. Valeroso and Quezon City Revenue Regional Director Marina De Guzman said the tax reform package was initiated to raise more funds and support President Rodrigo Duterte’s 10-point agenda, foremost of which is reducing the number of poor families and massive infrastructures.

They said the government has to raise taxes because the tax base is narrow, stressing that TRAIN will simplify the tax system.