LEGISLATORS from both houses of Congress called for the tax reform law implemented at the start of the year to be reviewed due to its impact on prices.
In a statement, Senator Joseph Victor G. Ejercito urged the government’s economic managers to review the law, known as Tax Reform for Acceleration and Inclusion (TRAIN), after headline inflation hit 4.5% in April.
“They should assess whether the increase in inflation is still manageable. Otherwise, implementation of TRAIN 1 should be suspended and re-studied,” he said, adding that inflation would negate the positive impacts of the tax reform law on income.
Senator Paolo Benigno A. Aquino IV said: “We owe it to the Filipino people, especially the poor, to ensure that TRAIN is not making life more difficult. We must look for immediate solutions, like the suspension of excise taxes.”
He added the additional P200 financial assistance offered the government to the poorest Filipinos should be increased to P400 to P500 to address the inflationary effects of the law.
Magdalo Party-list Representative Gary C. Alejano, meanwhile, filed a House Resolution (HR) calling for the immediate review of RA 10963, saying price increases are having a disproportionate impact on the poor.
“The common Filipino now suffers under the weight of the new TRAIN Law. And it has only been four months since the law took effect, yet we see the results to be totally inimical to its objectives,” Mr. Alejano said on Tuesday in a statement.
The resolution, dated May 7, was filed amid rising inflation, in part due to higher fuel prices. Signed into law on Dec. 19 by President Rodrigo R. Duterte, the law lowered personal income taxes, but imposed additional taxes on fuel, cars, and sugar-sweetened drinks among others. Proceeds are expected to help finance the government’s aggressive infrastructure program.
The Philippine Statistics Authority reported that inflation rose to 4.5% in April from 4.3% in March, with both months breaching the central bank’s target range of 2-4%.
Mr. Alejano cited Pulse Asia’s March 2018 Ulat ng Bayan survey which found that 86% of Filipinos were strongly affected by the increases; 13% somewhat affected and 1% not affected. “So all in all, a total of 99% were affected and, again, this is only after three months of the law’s implementation,” he said.
Mr. Alejano disputed claims that TRAIN will largely support the “Build, Build, Build” program, saying it will only fund 25% of the program at most, while the rest will be provided by loans from China.
He also proposed that government agencies, such as the Bureau of Internal Revenue and Bureau of Customs, be assessed and improved to avoid revenue leakage that “should have been enough to fund government projects without enacting the TRAIN law.”
The two senators also pointed out that the earlier assurances of the Department of Finance (DoF) and the National Economic and Development Authority (NEDA) that the law would likely raise the inflation level by 0.7% and that the inflation rate would remain within the projected 2% to 4% target — did not happen.
The Senate committee on economic affairs, chaired by Senator Sherwin T. Gatchalian, will resume its inquiry on Wednesday into the inflationary effects of the tax reform law and the social mitigating measures of the government to address inflation.
Mr. Gatchalian has said the Legislative branch may possibly recommend the suspension of the law to curb and control inflation, but it would depend on the outcome of the hearings.
“Tomorrow in our hearing, we invited experts especially the BSP (Bangko Sentral ng Pilipinas) and the DoF to make sure that inflation remains in check and controlled. We will find out the government’s strategy in the next six months,” he said.
Two senators on Tuesday called for the suspension of Republic Act No. 10963 or the TRAIN Act due to rising prices of goods and services. He added the additional P200 financial assistance of the government to the poorest Filipinos should be increased to P400 to P500 to address the inflationary effects of the law.
Both senators also pointed out that the earlier assurances of the DoF and NEDA — that the law would likely raise the inflation level by 0.7% and that the inflation rate would remain within the projected 2% to 4% target — did not happen. — Camille A. Aguinaldo, Charmaine A. Tadalan

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