The Duterte administration’s promise of a higher take-home pay for workers will be rendered useless because of new taxes on fuel and cars, among others, that will be imposed by a tax reform bill approved by the House Ways and Means panel this week, opposition lawmakers said Friday.
Rep. Tom Villarin of Akbayan party-list noted that while the reduction in personal income tax to 25 percent from 32 percent would benefit call center and others who earn P22,000 monthly, the disposable income arising from lower income taxes would be eaten up by increases in prices of food and consumer products as a result of pass-on taxes.
“Excise taxes on petroleum would hit public transport drivers, farmers, fisherfolk and the marginalized hard.
Where is the sustainable mechanism that would cushion its effect on their income and livelihood? If government will just provide dole-outs, then more people will lose jobs and go hungry,” Villarin said in a text message.
“Taxes on automobiles would not affect the lower classes, only the middle class. It will divert spending from cars to other consumables or people will just save. Its net effect is negligible,” Villarin added.
The House tax measure seeks to impose additional excise taxes on petroleum products, including a P6 per liter excise tax on diesel fuel spread over three years.
The Finance department’s target revenue from new fuel taxes is P120 billion. The removal of tax exemptions provided under by 79 laws will raise another P90 billion.
Rep. Teddy Baguilat, for his part, argued that new taxes should be limited to measures that address health problems, such as increased taxes on sweetened beverages.
“By increasing fuel taxes, you would raise inflation rates and burden the commuters who are daily wage earners,” Baguilat said.
Rep. Gary Alejano of Magdalo party-list shared Baguilat’s sentiments, saying that increasing taxes on fuel would consequently increase the prices of transported goods.
“The poor will absorb this increase while not benefiting from the decrease in income tax because they do not have income that is taxable in the first place,” Alejano added, referring to an existing law that exempts minimum wage earners from paying income tax.