THE administration’s tax reform package should have “minimal” effects on the prices of basic commodities and should not be more than 8 percent, the Trade Department assured.
Trade Secretary Ramon Lopez told a Malacañang news briefing Friday: “In the 10-peso minimun fare, in effect the increase is less than 80 centavos…there is no reason for anxiety since the effect is very minimal, particularly with apprehensions that every commodity price would also increase.”
On Saturday, Lopez slammed what he branded as “baseless” allegations on the possible effects of the government’s tax reform package to the prices of basic commodities, after administration critics vowed to challenge “regressive” provisions of the new law before courts.
In a related development:
• A militant farmers’ group on Saturday warned the administration’s tax reform package would have an adverse impact on the the cost of major staples and agriculture produce, as a result of increased excise taxes on petroleum products.
In a statement, the Kilusang Magbubukid ng Pilipinas said in the coming weeks and months, farmers “will definitely feel the brunt of TRAIN on our production” as a result of the new tax reform package.
“The additional excise tax on petroleum products ranging from P3 to P7 per liter will directly impact the agricultural production cost as farmers and agricultural producers use diesoline and gasoline in every process of production from land preparation, planting,
harvesting, post-harvest and transportation. Most farm equipment used by farmers run on gas and diesel including deep-well for irrigation, hand tractors, threshers, drying facilities and milling,” Antonio Flores, KMP secretary general, said in a statement.
“The production cost of agricultural products will increase and will instantly translate to increase in the prices of rice, vegetable produce, poultry, livestock, dairy products and other food stuff,” he added.
They also scored false assurances made by Malacañang the new tax package would have “minimal” and “temporary” effects on the poor, most of whom do not belong to the formal sector.
“Malacañang and Duterte’s economic managers were quick to boast that TRAIN will lower the personal income tax and increase the take-home pay of employees, but what about farmers and fisherfolks who do not depend on wage and salaries but on income from production yield?”
“The domino and inflationary effect of TRAIN will impact majority of the middle to lower income population, with the poor and jobless sectors as the most vulnerable. The agriculture and farmers’ sector are vulnerable to the pass on effects of TRAIN. The effects of TRAIN are deadly.”
“The public ought to brace for impact as Duterte’s TRAIN will hit us hard,” Flores said.
In particular, Lopez gave assurances the prices of basic goods would not move, despite provisions increasing excise taxes on fuel, which critics attribute to a possible increase in the prices of basic goods.
In a separate radio interview, Lopez said there was no need to adjust the suggested retail prices of their products even if prices of fuel products would increase.
“As far as increased oil prices are concerned, the increase is only seven to eight percent, and usually that is multiplied, and it would be very negligible,” he said.
There is also market competition, where consumers have a choice with regard to sellers or vendors, which will ensure price stability, Lopez added.
Those who will take advantage and charge excessive prices will be penalized with fines ranging from P20,000 to P1 million, Lopez warned.
He also urged TRAIN’s critics to stick to a “objective” and “numbers-based” discourse on the new tax law, and not to resort to fear-mongering.