Palace: TRAIN gains outweigh coming price hikes

MANILA, Philippines — The advantages of the tax reform law outweigh the impact of higher consumer prices, Malacañang said Monday as it stressed that additional revenues would go back to the public in the form of social services and jobs. 

 

Presidential Communications Secretary Martin Andanar said the revenues to be generated by the Tax Reform for Acceleration and Inclusion (TRAIN) would go to infrastructure projects that would create new jobs.

 

"The benefits are greater...the pros outweigh vis-à-vis the TRAIN Law because if the government collects more taxes, the revenues will go to the different investments of our government and different projects. If these goes to the projects, jobs will be created," Andanar told radio station dzRH. 

 

Andanar was asked to react to criticisms that the TRAIN poses a burden to different sectors because it would increase the prices of goods. 

 

TRAIN, which was signed into law by President Duterte last December 19, imposes new taxes on diesel, liquefied petroleum gas, kerosene and bunker fuel for electricity generation and higher taxes on other oil products.

 

The new taxes are expected to raise transport fares, electricity costs and consumer prices.

 

The new law also imposes a P6 tax per liter for drinks containing caloric or non-caloric sweetener and P12 per liter tax for drinks containing high fructose corn syrup or combination. 

 

Lawmakers have given assurances that measures would be in place to mitigate the impact of the consumer price hikes. Those measures include giving substantial allocations to programs designed to help indigents and the elderly.

 

Despite the looming price increases, Andanar insisted that TRAIN would be beneficial to Filipinos because it reduces the income taxes for 99 percent of income taxpayers.

 

He also noted that the new law exempts medicines for diabetes, high cholesterol and hypertension from value-added tax. 

 

"Our countrymen will save a lot in terms of payment of taxes," Andanar said. 

"Of course, the jobs to be generated is important because many are complaining about lack of job opportunities et cetera. You can be sure that there will be more jobs for our countrymen," he added.  

 

Andanar said small and micro enterprises would also be governed by a simplified tax rate, noting that they already have the option to pay a flat tax of eight percent on gross sales instead of the income and percentage taxes.

 

He said the Duterte administration welcomes criticisms against the TRAIN law, saying they are part of democracy and keep the government on its toes. 

 

TRAIN, the first phase of the Duterte administration’s tax reform package, is expected to generate P120 billion in additional revenues.

 

The government aims to use the additional tax revenues to bankroll its P8.1 trillion "Build Build Build" infrastructure program.