cyrille villanueva,
The prices of goods fluctuate a lot, may it be because of dwindling demand or overflowing supply.
In recent days however, there has been a sudden and undeniably huge increase in prices of products like petroleum, minerals, tobacco, alcoholic beverages, jewelry, and sugar after the approval of Republic Act 10963, also known as the Tax Reform for Acceleration and Inclusion Law (TRAIN).
According to the Department of Finance (DOF), “The goal of the first package of the Comprehensive Tax Reform Program or TRAIN is to create a more just, simple, and effective system of tax collection, as per the constitution, where the rich will have a bigger contribution and the poor will benefit more from the government’s programs and services”.
Specifically, the TRAIN Law aims to reduce the personal income tax. Those with an annual income of less than 250,000 pesos, which includes 83% of taxpayers in the Philippines, will have 0% tax rate. Those with an annual income of 250,000 to 8,000,000 pesos will have a lower income tax rate, with further reductions by 2023. However, there are things that won’t change from the previous tax law. Those whose annual income is over 8,000,0000 pesos, which includes 0.1% of taxpayers in the Philippines, will still have to pay the current tax rate.
The TRAIN Law also aims to shorten the list of products exempted from the Value Added Tax (VAT) down to basic necessities like raw food, education, and health. Small-business owners who own firms earning less than 3,000,000 pesos a year will not be required to pay the 12% VAT.
However, because of the law, items like oil, automobile products, petroleum, minerals, tobacco, alcoholic beverages, jewelry, and sugary items will also have an excise tax, therefore increasing their retail prices.
This will have a huge impact on taxpayers.
Consider a regular person buying a kilo of fish in the market. For that fish to be available, a vendor must order it from a supplier. As the order is placed, these products have to be transported to the market. With the implementation of the TRAIN law, there would be price hikes in every product and consumable good in the market. This will then force the dealers, vendors, and suppliers to increase the prices of their services to compensate for the increased cost of the maintenance of their assets, which will leave consumers having to pay more to get by.
With the increased prices of our favorite consumable goods and other products, there will be struggles to get used to the more expensive items and also with the enormous price hike gasoline stations had.
This will not only affect the citizens who are already earning money, but students as well.
The first thing students will notice is the gradual increase of Public Utility Vehicle (PUV) fares because of the oil, petroleum, and automobile excise tax. The automobile excise tax applies to automobile products which run on gasoline. This will cause PUVs to increase their service fee to compensate.
The prices of their favorite sweetened beverages will also increase due to the TRAIN law’s sweetened beverage excise tax. Students would no longer enjoy soothing drinks that are sulit from nearby food stalls in the university and fast food restaurants.
These taxes will leave people with higher prices to pay, and students with less allowance in their wallets.
Wenona Catubig, a student of the University of the Philippines Integrated School (UPIS), shared her thoughts about the tax increases. “Maraming naging epekto yung pagtaas ng tax sa akin bilang estudyante. Nagmahal yung mga bilihin kaya kinailangan kong magtipid lalo na't nanatili yung amount ng allowance ko. Kinailangan ko rin i-budget yung pang-data ko lalo na't constantly kailangan ng internet for school,” she expressed.
(As a student, I was affected in several ways when the taxes went up. The prices of products increased. I had to be wiser with my money since my allowance didn't change. I also had to budget my data usage since I constantly need internet for school.)
With the larger amount of money that will be collected from the citizens, the government will be given additional revenue for further infrastructural projects and programs for the Philippines to expand and further increase its economic growth, yet it seems that this will be a rough ride. Prices will go up and there is nothing that can stop this. It is true that this law will be great for the long haul, but during the process, there are people who will be negatively affected, such as students and those living below the poverty line.
It would be advisable to review and revise the law after its supposed purpose has been fulfilled. Yes, there will be changes in the future, such as the reduction of income tax to those who earn less than 8,000,000 pesos annually by the year 2023. But it would be better to make the implementation of the excise tax with a condition that those who earn a lot less be exempted from it.
There must also be an improvement to the minimum wages of Filipinos in order to keep up with the TRAIN law. The Philippines is not yet ready to have increased prices on the products they consume in order to live, especially when it would cost them more than what they are earning in their own jobs and businesses.
The people of this nation will press on. Filipinos, especially the youth, are known to be very resilient. They have this great ability to rise from the ashes and smile at the aftermath of a calamity. They have faced many challenges, hindrances and inconveniences in the past. The negative effects of this law will not break their spirit.//by Marlyn Go and Cyrille Villanueva
Opinion: Here comes the TRAIN!
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| Photo Credit: Gail Clemente |
In recent days however, there has been a sudden and undeniably huge increase in prices of products like petroleum, minerals, tobacco, alcoholic beverages, jewelry, and sugar after the approval of Republic Act 10963, also known as the Tax Reform for Acceleration and Inclusion Law (TRAIN).
According to the Department of Finance (DOF), “The goal of the first package of the Comprehensive Tax Reform Program or TRAIN is to create a more just, simple, and effective system of tax collection, as per the constitution, where the rich will have a bigger contribution and the poor will benefit more from the government’s programs and services”.
Specifically, the TRAIN Law aims to reduce the personal income tax. Those with an annual income of less than 250,000 pesos, which includes 83% of taxpayers in the Philippines, will have 0% tax rate. Those with an annual income of 250,000 to 8,000,000 pesos will have a lower income tax rate, with further reductions by 2023. However, there are things that won’t change from the previous tax law. Those whose annual income is over 8,000,0000 pesos, which includes 0.1% of taxpayers in the Philippines, will still have to pay the current tax rate.
The TRAIN Law also aims to shorten the list of products exempted from the Value Added Tax (VAT) down to basic necessities like raw food, education, and health. Small-business owners who own firms earning less than 3,000,000 pesos a year will not be required to pay the 12% VAT.
However, because of the law, items like oil, automobile products, petroleum, minerals, tobacco, alcoholic beverages, jewelry, and sugary items will also have an excise tax, therefore increasing their retail prices.
This will have a huge impact on taxpayers.
Consider a regular person buying a kilo of fish in the market. For that fish to be available, a vendor must order it from a supplier. As the order is placed, these products have to be transported to the market. With the implementation of the TRAIN law, there would be price hikes in every product and consumable good in the market. This will then force the dealers, vendors, and suppliers to increase the prices of their services to compensate for the increased cost of the maintenance of their assets, which will leave consumers having to pay more to get by.
With the increased prices of our favorite consumable goods and other products, there will be struggles to get used to the more expensive items and also with the enormous price hike gasoline stations had.
This will not only affect the citizens who are already earning money, but students as well.
The first thing students will notice is the gradual increase of Public Utility Vehicle (PUV) fares because of the oil, petroleum, and automobile excise tax. The automobile excise tax applies to automobile products which run on gasoline. This will cause PUVs to increase their service fee to compensate.
The prices of their favorite sweetened beverages will also increase due to the TRAIN law’s sweetened beverage excise tax. Students would no longer enjoy soothing drinks that are sulit from nearby food stalls in the university and fast food restaurants.
These taxes will leave people with higher prices to pay, and students with less allowance in their wallets.
Wenona Catubig, a student of the University of the Philippines Integrated School (UPIS), shared her thoughts about the tax increases. “Maraming naging epekto yung pagtaas ng tax sa akin bilang estudyante. Nagmahal yung mga bilihin kaya kinailangan kong magtipid lalo na't nanatili yung amount ng allowance ko. Kinailangan ko rin i-budget yung pang-data ko lalo na't constantly kailangan ng internet for school,” she expressed.
(As a student, I was affected in several ways when the taxes went up. The prices of products increased. I had to be wiser with my money since my allowance didn't change. I also had to budget my data usage since I constantly need internet for school.)
With the larger amount of money that will be collected from the citizens, the government will be given additional revenue for further infrastructural projects and programs for the Philippines to expand and further increase its economic growth, yet it seems that this will be a rough ride. Prices will go up and there is nothing that can stop this. It is true that this law will be great for the long haul, but during the process, there are people who will be negatively affected, such as students and those living below the poverty line.
It would be advisable to review and revise the law after its supposed purpose has been fulfilled. Yes, there will be changes in the future, such as the reduction of income tax to those who earn less than 8,000,000 pesos annually by the year 2023. But it would be better to make the implementation of the excise tax with a condition that those who earn a lot less be exempted from it.
There must also be an improvement to the minimum wages of Filipinos in order to keep up with the TRAIN law. The Philippines is not yet ready to have increased prices on the products they consume in order to live, especially when it would cost them more than what they are earning in their own jobs and businesses.
The people of this nation will press on. Filipinos, especially the youth, are known to be very resilient. They have this great ability to rise from the ashes and smile at the aftermath of a calamity. They have faced many challenges, hindrances and inconveniences in the past. The negative effects of this law will not break their spirit.//by Marlyn Go and Cyrille Villanueva
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