House urged to review TRAIN law

MANILA, Philippines — Bayan Muna Rep. Carlos Zarate yesterday urged the House of Representatives to review the Tax Reform for Acceleration and Inclusion (TRAIN) law.

Zarate, one of those who voted against the TRAIN bill, made the appeal in view of what he described as the continuous monthly increases in consumer prices due to new and higher taxes the new law has imposed.

He said Congress should consider amending the law.

Citing a report from the Philippine Statistics Authority, Zarate said food prices rose by 4.8 percent in February and 5.7 percent last month, while in January, inflation was recorded at four percent.

“Prices (have been) going up every month since January, when Congress and President Duterte imposed new and increased taxes under the law they euphemistically call tax reform,” he said.

The culprit behind the price hikes is clearly the TRAIN law, according to Zarate.

The lawmaker pointed out that claims by the Departments of Finance and Trade and Industry that the TRAIN law has an insignificant impact on consumer prices “are fake news.”

He stressed that prices of food and other consumer products have increased due to the new tax on diesel, kerosene, liquefied petroleum gas and bunker fuel for electricity, and higher taxes on gasoline and other oil products.

There is also the higher levy on coal, which many power plants use to generate electricity and which adds to higher costs for manufacturers, according to Zarate.

“Needless to say, producers pass on such higher costs to consumers,” he said.

Zarate warned the public that the monthly increases in prices since the beginning of the year are just the start of the “harsh effects” of the TRAIN law.

He pointed out that the taxes and tax increments that took effect in January are only first of three yearly installments of higher levies under the TRAIN law.

“We have yet to feel the full impact of these taxes that are spread over three years,” he said.

Zarate said that while the law exempts workers with a monthly income of P20,833 from paying income tax, millions of minimum wage earners are not benefitted since their salary is lower than the tax-free threshold.

Besides, they were already exempt from income tax before the TRAIN law was enacted, he said.

“What makes matters worse for them is that while the law does not benefit them, they suffer its adverse effects like higher electricity, fuel and food prices,” he added.

The tax on diesel and bunker fuel started at P2.50 per liter in January, but because of the TRAIN law, it will go up by P2 to P4.50 in 2019 and by P1.50 to P6 in 2020.