TRAIN benefits outweigh higher consumer prices — Palace

MANILA, Philippines — The advantages of the tax reform law outweigh the impact of higher consumer prices, Malacañang said yesterday as it stressed that the 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 the cons 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 go to the projects, jobs will be created,” Andanar told radio station dzRH.

Andanar was reacting to criticisms that the TRAIN law would further burden the people as it would increase the prices of goods.

TRAIN, signed into law by President Duterte last Dec. 19, imposes excise tax on oil of up to P6 over the next three years, and raises taxes on other products including motor vehicles.

It also imposes a P6 tax per liter on drinks containing caloric or non-caloric sweetener and P12 per liter tax on drinks containing high fructose corn syrup or combination.

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

Lawmakers have assured the public that measures would be in place to mitigate the impact of the consumer price hikes, including the giving of substantial allocations to programs designed to help the 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 medicine 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 are 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.