PRESIDENT Rodrigo Duterte on Monday, July 23, turned down proposals to suspend the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law despite its inflationary impact.
Duterte, in his third State of the Nation Address, defended his administration's move to push for the tax reform package, saying that the law was intended to promote "sustainable growth."
"Some have incorrectly blamed our efforts toward a fairer tax system for all the price increases in the past months, and some irresponsibly suggesting to stop Train’s implementation," the President said.
"We cannot and should not. We need this for sustainable growth that leaves no Filipino left behind," he added.
The Train Act, signed into law on December 19, 2017, increases the take-home pay of salaried workers as it raises the threshold for tax exemption.
But it also imposes excise tax on sweetened beverages, and raises excise taxes on petroleum, automobile, tobacco and coal.
Earlier, economic officials attributed the price increases to the "combined" effects of the government's first tax reform package and higher oil and food prices.
Inflation reached a five-year high of 5.2 percent in June and is expected to continue rising until it peaks in the third quarter before tapering off to settle within the government's 2 to 4 percent target in 2019.
This year's prices of liquefied petroleum gas (LPG), diesel, gasolene, and kerosene went up by P1, P2.50, P7 and P3, respectively, following the implementation of the Train Law.
By 2019, the excise tax on LPG, diesel, gasoline, and kerosene was expected to rise by P2, P4.50, P9, and P4, respectively.
Despite this, the President said he would not let the Filipino people suffer from the impact of the tax reform's implementation.
"Train is already helping poor families and senior citizens cope up with rising prices," he said. "We have distributed unconditional cash transfers to four million people, and we will help six million more this year." (SunStar Philippines)