Now that the Senate has approved the government's requested tax reform package, Senator Win Gatchalian is reminding the Department of Finance to "keep its end of the bargain" in helping poor families cope with expected price increases of essential commodities.
"The government has promised to roll out an expanded cash transfer program to shield 10 million impoverished and poverty-vulnerable families from the inflationary effects of this measure. The cash transfer program that was promised must be ready for implementation on Day One of the effectivity of the TRAIN tax package," he said upon the passage of Senate Bill No. 1592, the Tax Reform for Acceleration and Inclusion (TRAIN) Act, on third and final reading.
Gatchalian, the chairman of the Senate Energy Committee, stressed in particular the need to shield low income households from the expected increase in electricity rates due to the imposition of heavy excise taxes on fuels and minerals.
Particularly noteworthy among these is the staggered increase in the excise tax on coal from P10 to P300 per metric ton over the next three years, which the senator estimates will burden consumers with P10.5 billion in extra electricity charges during that span of time. Gatchalian vigorously opposed the colossal tax hike during floor deliberations, but was ultimately outvoted by its proponents.
"The coal tax, along with the increased excise taxes on diesel and bunker fuel, is poised to make electricity more expensive at a time when the Philippines already has the most expensive electricity rates in the entire ASEAN region," the senator noted.
He added: "Our estimates indicate that the increases in electricity rates are not negligible. These higher rates will be felt by Filipinos."
Despite his reservations, however, Gatchalian said the Senate had "achieved much" to "soften the burden of new taxes on underprivileged Filipinos," such as the increase of the tax exemption cap for low income earners and the simplification of tax filing procedures for SEPs - two ideas championed by the freshman senator during floor debates on the bill.
In closing, Gatchalian reminded his colleagues that the work of the Senate on tax reform was far from over.
"The Senate must use its oversight powers to ensure that the tax reform package is implemented in an equitable manner, so that most underprivileged sectors of our society will not suffer as a result," he said.
Source: Senate of the Philippines