The Duterte administration’s proposed Tax Reform bill that would lower income tax rates but increase taxees on fuel and sugar-sweetened beverages will make 60 million Filipinos poorer because the prices of basic goods and services will be higher, lawmakers warned on Friday.
Representatives Antonio Tinio and France Castro of the Alliance of Concerned Teachers issued the warning based on the think thank IBON Foundation’s research which they said used data from the Finance department.
Tinio cited that based on IBON’s computations, the Tax Reform bill will decrease the income of the poorest 4.6 million households with a monthly income of P5,214 to P8,315 by P737 to P980 annually.
The income of 4.6 million households earning P10,691 to P13,015 monthly, on the other hand, will be reduced by P1,163 to P1,374 annually.
Lastly, 4.6 million households which earn P15,746 to P19,269 monthly income will lose P1,687 to P2,088 yearly.
“The Department of Finance’s assurance that 99 percent of taxpayers will pay less taxes with the Tax Reform bill is not true. The poorest 60 million Filipinos will pay more taxes with higher prices on food, drinks, LPG (liquefied petroleum gas), transport fares, electricity, housing and other basic goods and services,” Tinio said in a statement.
Castro underscored that the P48 billion government subsidy which aims to cushion the impact of the Tax Reform bill would hardly make a dent since the proposed bill does not even provide specific details on who are entitled to such subsidy.
“The Finance department provided only scant details on the social benefits card and fuel vouchers, so there is no assurance that they will make up for the increased prices of basic goods and services,” Castro said.
“What can P10 a day do in the face of more expensive LPG, food and drinks, power, water and fare hikes?
And what will the poor do after three years when the P300 monthly unconditional cash transfer and other social protection measures end? These are merely temporary measures to the never-ending burden caused by the supposed Tax Reform,” Castro added.
The party-list lawmakers then argued that instead of helping the poor, the tax reform will enrich the already moneyed households estimated at 9.1 million since corporate executives already earning P280,309 to P598,132 monthly or P3.4 million to P7.2 million annually will have an additional P91,027 to P130,267 due to reduced income tax rates.
“Middle class households in the seventh to ninth income deciles—families whose only moderate incomes are doubly-eroded by inflation and excessively high taxes—certainly deserve tax relief. But it makes no sense at all for a supposed tax reform to give more to those earning more, especially if it also takes hundreds of pesos away from the poorest Filipinos who already have so little as it is,” Tinio said.
“This reform is by no means a fairer and more equitable tax system. We urge our senators not to pass the anti-poor, pro-rich bill. We also urge President Duterte: prove your pro-poor stand by dropping this as a legislative priority,” Tinio added.