One of the main proponents of the Tax Reform for Acceleration and Inclusion Act (TRAIN) in the Congress has described the law as “skillfully crafted” because it taxes the rich more while providing social mitigation measures to shield the poor from its temporary inflationary impact.
Albay Representative Joey Salceda, a senior vice chairperson of the ways and means committee of the House of Representatives, also said the TRAIN is “one of the best defensible public policy instruments in the history of this country,” given that it is the most viable tool to push the country closer to its national goal of becoming a progressive, more inclusive economy.
“The goal is to be a progressive country … How do you do it? By suspending TRAIN? No way! Do you want to make it a more egalitarian society? What make things egalitarian? When you are taxed more heavily than Ayala, but TRAIN erases that. Ayala now pays more, you pay less,” Salceda said during a recent forum on tax reform held in Legazpi City.
Salceda said that on the average, salaried employees now have at least P2, 000 more a month in their pockets because of TRAIN.
“The DOF (Department of Finance) has skillfully crafted a policy instrument in order to tax the rich but protect the poor. Tignan niyo yung mga payslip niyo (Look at your payslips). You have an additional P2, 000.00 per month. Hindi yun imbento (That’s not a fabrication). That’s TRAIN,” Salceda said.
Finance Secretary Carlos Dominguez said earlier that higher domestic demand was among the reasons for the higher inflation rate in the last three months, considering that people now have about P32.5 billion more to spend monthly as a result of the personal income tax (PIT) cuts under TRAIN, the unconditional cash transfer (UCT) program, the free tuition in State Universities and Colleges (SUCs), and the additional wages paid by the government under its aggressive spending program.
He said the substantial PIT cuts under TRAIN, the first package under the Comprehensive Tax Reform Program (CTRP), gave taxpayers an additional P12 billion combined in their pockets each month, while the free tuition in SUCs, which was made available in June, freed up another P3.5 billion that families would otherwise have saved up to pay for school fees in May. The UCT, meanwhile contributes some P2 billion per month.
The government’s increased spending of P167 billion for the first quarter, mostly under the “Build, Build, Build” infrastructure program, meanwhile, included wages paid that amounted to around P15 billion a month.
For 2018, some PHP 24 billion will be released to cover the poorest 10 million beneficiaries. In the next two years, this amount will increase to PHP 36 billion which corresponds to PHP 300 a month grant to the beneficiaries.
Dominguez has likewise pointed out that despite the elevated inflation rate, self-rated poverty and hunger have gone down as shown by the first quarter survey done by the Social Weather Stations (SWS).
Dominguez was referring to the SWS’ First Quarter 2018 Social Weather Report, which showed that from 32 percent in December 2017, the number of self-rated poor families dropped to 29 percent in March 2018.
The number of families experiencing involuntary hunger declined from 15.9 percent in December 2017 to 9.9 percent in March 2018 as shown by the same SWS survey.