MANILA, Philippines — Has anything been gained from the first package of the Tax Reform for Acceleration and Inclusion law?
This is the question of Asian Peoples’ Movement on Debt and Development deputy coordinator Mae Buenaventura, whose regional organization works for freedom from illegitimate and unsustainable debt, and for fiscal justice in terms of taxes and spending.
The trend throughout Southeast Asia has been to lower corporate income taxes to lure investors, while passing on the burden to the people through “regressive consumption taxes,” which is particularly bad for the poor.
“So ngayon nga, hindi pa fully implemented ang TRAIN, ‘andiyan na ‘yung taasan ng presyo. So whatever has been gained — kung meron man — from ‘yung P200 additional na supposedly safety net, ay halos walang halaga dahil nagtataasan ng presyo. Save perhaps for the carbon tax, talagang ino-oppose namin ‘yung TRAIN dahil ‘yun nga, nakikita na natin ‘yung waves ng cascading effects ng TRAIN sa presyo ng mga bilihin,” Buenaventura said on Wednesday at a media briefing on the Asia-Europe Conference on Public Services, which will be held on February 13 to 15 at Balay Kalinaw, University of the Philippines Diliman.
(Even now that TRAIN hasn’t been fully implemented yet, we already see prices going up. So whatever has been gained — if there is any — from the P200 additional [cash grants] that will supposedly be a safety net, is practically worthless because prices have been going up. Save perhaps for carbon tax, we really oppose TRAIN because, as we said, we see the waves of cascading effects of TRAIN on the prices of goods),”
Last month, Budget Secretary Benjamin Diokno said the government allocated P24.5 billion for unconditional cash grants worth P200 per month for the poorest 50 percent of households, or about 10 million families, to offset price increases resulting from the implementation of TRAIN.
The effects of TRAIN have been cited as among the drivers of faster price increases in January by Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla, while ING Bank N.V. Manila senior economist Jose Mario Cuyegkeng believes the inflation rate will keep rising until June.
Taxes are a collective pool of money for the development of the country, Buenaventura continued. “Whatever privileges you give from that pot must be very, very cautiously given.”
But, she said, even the government admits that it is losing financial resources through incentives. “Marami pang mga loopholes na tinatawag kung saan nalulustay ‘yung ganu’ng revenues (There are many so-called loopholes where revenues are being frittered away). We sign bilateral tax treaties with developed countries that the public knows little of because it isn’t talked about in Congress; it’s just concurrence. We also give preferential treatment to investors, corporations, which actually discriminates against the local, the Filipino corporations who have to pay the full 30 percent … So maraming ways na nawawala ang pera at sa tingin namin, kaya isa rin ‘yun sa reasons namin (So there are many ways that we are losing money and we think, that is one of our reasons) for opposing TRAIN because we’ve cited many other sources ng revenue.”
At the same time, Buenaventura urged the public to scrutinize the way taxes are being spent.
Government officials have pushed for TRAIN as the means to fund President Rodrigo Duterte’s P8-trillion “Build, Build, Build” infrastructure program.
“If you look at the list of projects, roads, highways, there’s even an airport in Bulacan that’s going to affect communities there; siyempre hindi sila ‘yung gagamit ng airport (of course, they’re not going to be the ones using the airport),” Buenaventura said.
But, she asked, what about the lack of government hospitals and classrooms?
“Marami pa doon nagka-quasi-private na (And many of them are now quasi-private),” she said, referring to the public hospitals.
“So talagang maliwanag ‘yung mismatches du’n sa anong nire-raise na revenues and what it’s going to be spent for, not to mention ‘yung loans na kasama niyan ano (So it’s really clear that there are mismatches between the revenues being raised and what it’s going to be spent for, not to mention the loans that come with it),” Buenaventura added.
Based on the “tax reform info magazine” of the Department of Finance, funds will be raised for major infrastructure projects such as:
- Bonifacio Global City-Ortigas Center Link Road
- UP-Miriam-Ateneo Viaduct along C-5/Katipunan
- Camarines Sur/Albay Diversion Road
- Pulilan-Baliuag Diversion Road
- Maasin City Coastal Bypass Road cum Sea Wall
- Tacloban City By-Pass Road
- Panay East-West Road
- Daang Maharlika
- Cagayan De Oro Diversion Road
- Valencia City-Pangantucan Diversion Road
Aside from that, according to the DOF, tax reform will go to 100 percent enrollment and completion rates, 113,553 classrooms, and an additional 181,980 teachers from 2017 to 2020.
It will also fund the establishment of 25 local hospitals and the upgrading of 704 local hospitals, as well as 100 percent PhilHealth coverage with better services. It will go to the upgrading and/or relocation of 263 rural and urban health units to disaster-resilient facilities; the construction of 15,988 new barangay health stations and 2,424 new rural and urban health centers; and the hiring of 176,922 more health professionals from 2017 to 2020, including 4,824 doctors, 104,629 nurses, 16,300 midwives, and 51,169 dentists, pharmacists, medical technologists, and public health associates.
Buenaventura also warned against the country’s loans, particularly from China, who “conditions are very vague. So hindi natin alam anong conditions we are being, anong terms we are being tied to by these loans (So we don’t know the conditions, the terms we are being tied to by these loans),” she said.
“We should not be reliant or dependent on debts or borrowings or foreign investments or the big business investments because we have the financial resources that we should be able to recover or raise for our own needs, lalo na nung karamihan na mahihirap (especially for the majority who are poor).”