By Komfie Manalo and Angie M. Rosales
Forces led by political opponents of President Duterte have politicized the Tax Reform for Acceleration and Inclusion (TRAIN) by linking it to the recent spike in prices, top officials said yesterday.
The rise in inflation rate to a record 4.6 percent last April was mostly the fault of traders taking advantage of the situation, Department of Finance (DoF) undersecretary and spokesperson Atty. Paola Alvarez said.
Senate President Vicente Sotto III confirmed some groups are taking advantage of the law to put inflationary pressure on prices of basic goods.
Sotto said he will support a public hearing on issues surrounding the TRAIN, focusing on the suggestion mostly from the opposition to suspend the provision on excise tax on fuel even before Congress deliberates on the second tax reform package or TRAIN II.
“There are those who are taking advantage and blaming it on TRAIN, but they themselves are raising their prices. We received such reports, we have to be certain that is why it’s necessary to conduct an inquiry,” Sotto said.
Sotto said some forces are pushing the suspension of the higher excise tax on fuel contained in the law which is uncalled for since the government cannot control the movement in crude prices. He added fuel prices went down recently.
Some senators had called for the suspension of the excise tax on petroleum products under the TRAIN law. The law raised taxes on gasoline by P7 per liter and P2.50 per liter on diesel.
Sotto said there is a provision allowing the suspension of higher excise taxes provided in the TRAIN which the DoF and economic managers are now looking into.
Gov’t price watch ongoing
Alvarez added hoarders and profiteers had used TRAIN as an excuse to jack up prices.
“Take the case of Yellow Cab (Pizza Co.), which raised its prices and cited the TRAIN law as the reason for the price increase. But later when the government conducted an audit of its prices, it backtracked and denied TRAIN was to blame for the spike,” Alvarez said.
Alvarez was referring to the apology issued by Yellow Cab Pizza for allegedly “mistakenly” told one of its clients that the price increases on its pizza products were attributed to the controversial tax law.
The pizza-chain restaurant said in its apology, “In a recent post, a fan inquired if we had increased the prices of our pizzas. We had mistakenly replied that this was due to the implementation of the TRAIN Law. The price increase was in light of the continued rise of global cheese prices, packaging materials, and local rent.”
Alvarez maintained the first package of TRAIN only contributed about 0.4 percent in the price hikes, saying the 4.6 percent inflation rate in May was also pushed by the rise in oil prices and a weak peso.
She said unscrupulous traders and sellers are taking advantage of the situation amid the noise created by Duterte critics, militant groups and politicians who want to hitch a ride on the TRAIN issue.
Alvarez maintained that TRAIN is vital for the implementation of the Duterte administration’s ambitious Build, Build, Build massive infrastructure programs, as well as the various social applications, such as the free college education and universal health care.
“Under TRAIN, all the sin taxes to be collected go directly to the government’s health program. If you remove TRAIN, then we can forget about the universal health program,” she said.