President Rodrigo Duterte's tax reform measure may lead to increases in the prices of basic goods and services, Sen. Paolo Benigno "Bam" Aquino warns Wednesday. Combination Photo, File

Bam Aquino: Fuel tax to lead to higher prices of goods and services
Audrey Morallo ( - January 3, 2018 - 5:24pm

MANILA, Philippines —  The tax increase on petrol products due to the Tax Reform for Acceleration and Inclusion law may have a "domino effect" and lead to higher prices of basic goods and services, Sen. Paolo Benigno "Bam" Aquino warned on Wednesday, as a labor group blasted the tax measure which it said would hit poor people the most.

Aquino, who was one of the four senators who voted against the ratification of the tax measure, warned that the increase on prices of petroleum, which would lead to hikes in the prices of goods and services, would ultimately be shouldered by consumers, especially poor Filipinos, who were already struggling to make ends meet.

"The projected rise in the prices of goods and services is worrying. This is an additional expense for the Filipino family, " Aquino said in Filipino.

READ:  Bam Aquino warns public to brace itself for price hikes in 2018

TRAIN mandates the imposition of an excise tax of P2.50 per liter on diesel and bunker fuel in 2018, P4.50 in 2019 and P6 in 2020. Gasoline excise tax meanwhile will increase from P4.35 per liter to P7 per liter this year, P9 in 2019 and P10 in 2020.

"In the end, poor Filipinos will shoulder and suffer from the effects of TRAIN on the prices of goods and services," Aquino said.

Aquino, Sens.  Panfilo "Ping" Lacson, Risa Hontiveros and Antonio Trillanes IV voted against the measure's ratification in the Senate in December 2017.

Aquino said that he opposed the measure as the government would not be able to implement a financial assistance program in time for the projected price increases due to the provisions on petrol tax and sweetened beverage tax.

READ: Winners and losers: How the TRAIN law affects rich, poor Filipinos

The Department of Finance initially proposed monthly cash transfers of P200 in the first year of TRAIN's implementation and P300 monthly in its second and third years of implementation to help cushion the tax measure's inflationary effects.

The DOF however said that it could not immediately implement the financial assistance package at the same time it was implementing the provisions of the tax measure.

"The government must speed up the implementation of the cash transfer program so poor people won't be burdened by the increase in prices," said Aquino.

Members of the Bukluran ng Manggagawang Pilipino meanwhile held demonstrations at the Mendiola Bridge to protest the expected rise in the prices of basic commodities stemming from the provisions of TRAIN.

“Contrary to what officials keep on reiterating that TRAIN is beneficial to the poor, it is all too evident that the capitalists shall simply pass their obligations to their clients- the lowly paid, contractual workers,” said Leody de Guzman, BMP president.

The group said that the new tax measure's increased income tax exemption would benefit only a portion of the middle class and affluent people as minimum wage earners had not paying the said tax since 2008.

BMP also argued that revenues generated from TRAIN to be spent for the government's massive infrastructure program had not direct impact on the poor.

"The poor will suffer the brunt of the tax impositions for sourcing from them the biggest share in its tax revenues where in fact he has not lifted a finger to uplift their economic standing and at the same time freeing corporations of their obligations," the group said.

READ: How Duterte's new tax law can affect you

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