National government agencies have to allay fears on increase of prices of prime commodities as a result of the implementation of the first package of the new tax reform law.
Third District Rep. Arthur Yap pointed this out as he also explained that the Tax Reform, for Acceleration and Inclusion (TRAIN) law recently signed by President Rodrigo Duterte is still on the honeymoon period.
Yap is one of the co-authors of TRAIN and chair of the House Committee on Economic Affairs who participated in the committee deliberations of the bill proposing its passage.
Responding to the concerns raised by concerned citizens, Yap believes the national government agencies- -one is the Department of Trade and Industry (DTI)- -has to take action if there are profiteers who would use the TRAIN Law to justify price increases.
“If you jack up your prices and there is no necessary basis, that is economic sabotage. So, we are challenging the DTI, kinahanglan ang price monitoring unit ninyo, out na kamo. Sa consumer protection unit ninyo, you should be ready to file the cases, together with the local government units. Kinahanglan hand in hand kamo sa pag-police and monitor sa prices of basic commodities,” Yap pointed out.
Yap clarified that in reality, the impact could not yet be felt by now which means there is no reason yet for increasing prices of commodities if the reference is the excise tax on fuel.
“Tungod kay sa tinuod ra, the impact is not yet now. It’s too early pa. Wala pa nga yong impact ng price increases. Ngano man nag-jack up na ng prices ang mga commodities. That’s not correct. So, we are waiting. We are seeing og magkiha kamo (DTI) tanan sa mga profiteers (who are) jacking up prices unnecessarily,” Yap added.
Yap explained that the most important impact of the TRAIN Law is the exemption from tax of those who are earning annual income of P250,000 and below which will “benefit millions of our consumers right now”.
On the other hand, the issue raised now is “whether there is a reason for the prices of all our commodities to rise because of the tax package where the gasoline is subjected to an excise tax”.
“So we believe, according to the Department of Finance, there is no reason to increase the prices. So, we have to watch and wait what the government executive offices are going to do, because they were the ones who approached Congress. They were the ones who proposed the provisions of the law,” according to Yap.
He elaborated that during the hearings on the bill proposing the new tax reform law, the congressmen asked the DoF officials that if the tax package which carries an imposition of excise tax on fuel, would there be no increase of prices on prime commodities.
He said the DoF assured that it won’t result to the increase of prices of commodities and with this assurance, the congressmen believe they have “to give it a try as long as we have increased revenues to collect and as long as we also have increased money to spend for infrastructures”.
“The government is also saying that all of these companies who are jacking up prices without basis are going to be sued. Mademanda sila, makiha silang tanan. So we are waiting and seeing what the government actually will do, because they are the ones who proposed it,” according to Yap.
He added that the executive side had explained that the government has to increase collection and for which, the legislative branch supported by studying the proposed provisions of the new tax reform law to be able to “give the government additional revenues” with the assurance that they have to watch on its impact on the prices of commodities.
“Ingon sila, no no. Sir, it will not be affected. In the last six years, there were price increases sa fuel wala man nato nabati. They did not jack up the prices of goods. So we will see what they will do. So we supported them,” Yap said.
He pointed out that there is still a period where the effect will slowly be felt, but the increase of prices of some products has already overtaken it.
“Naunahan na yong period. Wala pa yong period, nag-jacking up na ng prices. You can now hear profiteering. There is a challenge to DTI and LGUs. But we should not blame the mayors. We should not blame the governors in this matter. This is a national government law. So, naghuwat ta sa action sa national government. So, ang mga national government agencies. Then, the lead on the issue would be the DTI, because this is about consumer protection. So, we are waiting for DTI to start filing cases against those companies that are jacking up prices,” according to Yap.
PRICES OF SOFTDRINKS
On the rationale that the government intends to tax more the activities that are harmful to heath, Yap confirmed that it is indeed the rationale- -to tax sugar.
Yap, however, said he was one of the congressmen who opposed to the portion of the law that provides for taxing sugar in drinks.
He elaborated that he was one of those congressmen who believe that while the government has to increase and rationalize the tax structure, he did not support the portion on taxing sugar because it is actually, in a sense, taxing water.
“When you tax a drink, you have to check how much sugar and how much water in that drink. There is more water than sugar in that drink. If you are truly taxing sugar, then it must be by the content of sugar and not the entire drink,” Yap explained.
He said that he had reasoned during the committee deliberation that if it is the sugar that is to be subjected to taxation, being harmful to health, ice cream, candy and cakes should have been considered also.
“I said why are you taxing the entire drink? If you say it is for health- -that sugar is the culprit nga kontra sa atong health- -what about ice cream? What about birthday cakes? Di ba ang birthday cakes is full of sugar? Di ba ang ice cream is full of sugar? Di ba ang candy is full of sugar? Ngano man wa man nato gi-tax ang mga candy, ang mga ice cream, ug ang mga cakes? Ngano man mga sugar drinks ra? So, what are you really taxing- -the volume of sugar or you are taxing water? That was my comment at that time,” Yap said.
However, he could just do so much because it is “part of the entire package” and what is to be taxed now are sugar drinks.
“So, I was not one of those congressmen. So forgive me, I cannot answer the issue on the taxing the sugar drinks. I will not justify that portion,” Yap added.
EXCISE TAX ON FUEL
Yap further explained that he supports the imposition of excise tax on fuel for transportation but not those that are being used for cooking.
He also believes that the government should concentrate also on “a more active collection of taxes”.
“Bisan ang BIR and DoF, during the committee deliberations, they admitted that daghan sa large taxpayers, ang mga uncollected taxes is a few hundred billion pesos of taxes. So, I said, you should concentrate also in tax collection. Around 200-300 billions of pesos taxes are not collected. You have to concentrate on that. And then rationalize,” according to Yap.
As to taxing fuel, he explained that it is needed because “the indexation is more than 20 years old already”.
“So, we have not set up the proper indexation on fuel. But I did not agree that we are going to tax kerosene, and LPG because that is being used by our people for cooking. Well, if you want transportation, okay. For basic fuel, we have to, but not that sector of fuel that is being used by the poor,” according to Yap.
He also explained that “there are many nuances, so it is difficult to answer this issue about the TRAIN.
“See? There are many nuances in the details of the law. You may be for it, but you are against it. You are against, but you may be for it. So, para nako, wait and see. We trust the DoF in what they really want to do,” Yap added.