A lawmaker warned proponents of a tax reform bill not to pass the measure without identifying the beneficiaries of the proposed subsidies.
Rep. Edcel Lagman of Albay referred to a provision in the Tax Reform for Acceleration and Inclusion (TRAIN) measure that states that a P48-billion subsidy – representing 40 percent of the expected P120 billion additional revenue – will fund the Social Benefits Program that will grant qualified beneficiaries a Social Benefit Card as well as finance fuel vouchers to be given to qualified transport franchise holders.
The measure, however, is silent on how the qualified beneficiaries of the Social Benefits Program will be determined.
Also, the government subsidy is seen to be good for only three years since the increased fuel taxes will be staggered for three years.
“The leadership of the supermajority in the House of Representatives should not pass this without clear and enabling provisions mitigating the adverse impact of new revenues on the vulnerable sectors. While the low income earners will not benefit from the reduction of the income tax rate because they are already tax-exempt, they will suffer the cascading effects of the increased excise tax on petroleum products as the prices of basic goods and services will become more expensive, including transport and mass housing,” Lagman said in a statement.
He argued that there must be a definitive expenditure link between revenues generated and specific percentage earmarking for infrastructure such as public transportation, education, health and social protection.
“A general attribution of revenues to expenditure is not sufficient. The projected cash vouchers for the poor must be well-defined and qualified to benefit the truly marginalized, and the provision on cash vouchers must be specifically provided in the bill and must be implemented through the annual General Appropriations Acts,” Lagman said.
Rep. LRay Villafuerte of Camarines Sur said the bill’s passage will allow the government to accomplish its primary objective of inclusive growth considering that the TRAIN bill exempts those earning P250,000 and below a year from paying income taxes.
“This will put us on track of President Duterte’s vision to eradicate extreme poverty in one generation by 2040,” Villafuerte, an author of the measure, said in a statement.
Aside from additional fuel taxes, the TRAIN bill also seeks to remove Value Added Tax (VAT) exemptions of several transactions.
House Majority Leader Rep. Rodolfo Fariñas of Ilocos Norte earlier said the House of Representatives is set to approve the bill, which also seeks to impose a P6 per liter excise tax on diesel, on third and final reading this week.