Thursday, December 21, 2017
Erwin P. Nicavera
WHILE local businessmen are optimistic that the newly-signed tax reform law will result to more infrastructure projects and spur further developments in the country, a labor group in Negros Occidental is apprehensive of its impact to the workers.
Frank Carbon, chief executive officer of Metro Bacolod Chamber of Commerce and Industry (MBCCI), said that more than the income tax exemption for workers earning P21,000 a month, what they are looking at is the billions of pesos that will be generated through the law.
Carbon, at the sidelines of MBCCI’s year-end report at L’Fisher Hotel in Bacolod City yesterday, said these revenues will fund the government’s “Build, Build, Build” projects, which are actually needed especially in the local level.
“More infrastructure means more investments which will result to more employment,” he said, adding that “hopefully, the government will spread out these developments to Visayas and Mindanao.”
On December 19, President Rodrigo Duterte signed into law the tax reform package, or the Tax Reform for Acceleration and Inclusion (Train).
Aside from exempting workers with P250,000 annual taxable income, Train also raises the tax exemption for 13th month pay and other bonuses to P90,000.
Based on data from the Bureau of Internal Revenue, around 6.8 million or 90 percent of the 7.5 million individual income tax payers will be exempt from paying taxes starting 2018, more than triple than the current two million exempt minimum wage earners.
To compensate for loss of revenue from income taxes, Filipinos will need to pay excise tax on sweetened beverages, and higher excise taxes on petroleum, automobile, tobacco, mining and coal.
A P6 tax is imposed for beverages using caloric and non-caloric sweeteners while P12 tax is implemented on beverages using high fructose corn syrup.
Beginning 2018, there will be an adjusted excise tax on liquefied petroleum gas (LPG), P1; diesel fuel, P2.50; and regular and unleaded premium gasoline, from the current P4.35 to P7.
Excise tax doubles to four percent from two percent on vehicles worth P600,000; 10 percent on those worth P600,000 to P1 million; 20 percent on those worth P1 million to P4 million; and 50 percent on those worth above P4 million.
Electric and pick-up vehicles are exempt from paying excise tax while hybrid cars are taxed at half the rates, in a bid to promote greener and cleaner transportation.
Excise tax on all non-metallic mineral and quarry resources, and all metallic minerals, including copper, gold, and chromite, doubles to four percent from the current two percent.
Carbon said the tax reform is a “necessity” as it will enable the country to go out from spending money from borrowed sources.
“We cannot just continue borrowing money and use the bulk of our revenues for debt servicing,” Carbon said, as he stressed that if the burden for paying the borrowed sources will continue “we cannot improve the infrastructures. (It is) not only for basic services but also to encourage more investors to come.”
For his part, Negros Occidental Governor Alfredo Marañon welcomed the signing of the tax reform law.
Marañon said it will positively impact the countryside.
“More income for the government means more services will be given to the people,” he added.
Moreover, tobacco excise tax is also raised from the current P30 to P32.50 on January to June 2018; P35 on July to December 2018 to 2019; P37.50 from 2020 to 2021; P40 from 2022 to 2023; and four percent annual indexation from 2023 onwards.
Train also increases the coal excise tax from P10 per metric ton to P50 per metric ton in the first year of its implementation; P100 in the second year; and P150 in the third and succeeding years.
This provision of the law has brought apprehensions to local labor group General Alliance of Workers Association (Gawa).
Secretary-general Wennie Sancho said that although Train is an effective mechanism to fund the “Build, Build, Build” program of the government, it also caught the workers off guard.
Sancho said the excise tax on coal and petroleum products that would increase the prices of electricity and transportation will result to high cost of living.
“Whatever gains the workers may have in the reduction of income tax will be negated by the unabated increases in the prices of basic goods and services,” he said, adding that “the bottom line is erosion of the workers’ purchasing power in the coming year.”
Militant group Bagong Alyansang Makabayan (Bayan) also slammed the tax reform law of the Duterte administration.
Bayan-Negros chairman Christian Tuayaon, in his Facebook post, questioned how much will be deducted from the workers’ income tax compared to the increases in prices of goods they consume.
“This is the effect of the tax reform,” he added.
