Philippines Report

More senators join calls to suspend excise tax

Sen. Grace Poe and other senators on Friday joined labor organizations in calling for the suspension of the full implementation of the tax reform law amid growing complaints of soaring prices of basic commodities from consumers and transport groups.

Poe, chair of the Senate committee on public utilities, on Friday said the excise tax component of the Tax Reform for Inclusion and Acceleration (TRAIN) law specifically should be suspended because all goods were now affected by price hikes.

She was supported by Senators Nancy Binay and JV Ejercito.

Sen. Bam Aquino, who had voted against the TRAIN law, has filed a bill which seeks to roll back the excise tax on fuel when the average inflation rate surpasses the annual inflation target over a three-month period.

Poe, who spoke at her committee’s hearing on the impact of the government’s tax reform program in Iloilo City, said she would ask the Department of Finance and other government agencies to closely study the suspension of excise taxes on fuel.

Family expenses

Leaders of the Scrap TRAIN Network-Panay cited the rise in the price of diesel used by public utility vehicles—from P33 to P34 per liter in December 2017 to P43 to P44 this week, or a P10 increase.

The group said that due to the increase in the prices of oil products and other commodities, a Filipino farmer’s family was now incurring an additional expense of P2,644 and a worker’s family P3,640 monthly.

“While we recognize that taxes fuel the country’s economy, we should implement instead a progressive kind of taxation, not the regressive kind,” the group said in a position paper, adding that the rich should be taxed more than the poor.

6-percent inflation?

Transport leaders said jeepney drivers had to work 16 hours, or four hours more than before just to meet their daily needs.

Poe urged the immediate suspension of the law after inflation breached the 4-percent mark.

The inflation rate hit 4.3 percent in March and 4.5 percent in April. Poe said this could reach 6 percent in July.

Ejercito, who voted to pass the TRAIN law, said the Senate version of the bill had provided for lower excise taxes on fuel.

Taxes should be higher on the so-called “sin products,” such as alcoholic beverages and cigarettes.

In a statement, he said he was renewing his call to suspend the increase in excise tax on fuel products “in order to protect the interests of consumers and the public.”

While we understand the need of government to increase revenues, we need to prioritize the protection of the public who are bearing the brunt of these high prices which is negating the increase in take-home pay brought about by lower income taxes,” Ejercito said.

Wage hike clamor

Renato Magtubo, chair of the labor group Partido Manggagawa, said the impact of the TRAIN law on prices should be enough reason for the regional wage boards to hold summary proceedings on pay hikes even without any petition being filed.

The regional wage boards need not wait a year to lapse from their last-issued wage orders before they can conduct public hearings on wage petitions. In fact, they can even act motu proprio on this issue on the basis of a supervening event like this one,” Magtubo said.

Magtubo’s group also supports a national minimum wage rather than the current regional wage system.

Kilusang Mayo Uno has made a similar call, demanding a P750 national minimum daily wage for private sector workers and a monthly pay of P16,000 for government employees.

The daily minimum wage ranges from a low P256 (in the Ilocos region) to P512 (in Metro Manila).

The Trade Union Congress of the Philippines has urged the government to lower electricity rates to ease the impact of the TRAIN law

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