Duterte nixes tax reform suspension

Dharel Placido, ABS-CBN News

Posted at May 31 2018 02:38 AM

Diokno: 'We should be less of a crybaby'

MANILA - President Rodrigo Duterte on Wednesday seemed cool to the idea of suspending the government’s tax reform program, saying his administration needs revenues to fund its projects.

Opposition lawmakers and militant groups have been calling for a review or possible suspension of the Tax Reform Acceleration and Inclusion (TRAIN) law amid the skyrocketing prices of fuel and other basic consumer goods.

The President acknowledged the impact of the tax reform on the public’s purchasing power, but he said he is not amenable to law’s suspension.

“All the while, [we are] having problems. Inflation is always there. There are many reasons, but actually, one of them is TRAIN. But I need money also to run the country. If you do not give it, fine,” Duterte said in his speech during the change of command ceremonies of the Presidential Security Group in Malacañang.

Budget Secretary Benjamin Diokno has also rejected the suspension of tax reforms midway since revenues from the new duties help fund government programs.

Higher duties on fuel are also not entirely to blame for rising pump prices, Diokno said.

"I think we should be less of a crybaby. We are not going to keep this money in the treasury. We are going to benefit from this. It is for the poor," he said.

Inflation reached 4.5 percent in April, fanning calls for the government to at least roll back additional duties on petroleum products.

The law provides for the suspension of future increases in excise taxes on fuel if the price of Dubai crude reaches $80 per barrel.

The TRAIN law raised duties on fuel, sugary drinks and cars to offset a reduction on personal income tax rates and help fund the government's P8 trillion infrastructure program.

The Finance department said fuel prices will still increase even in the absence of the TRAIN law due to the steady hike of oil prices in the world market. It said it’s better that the law is in place since it has programs to protect the country’s poorest sector, such as the multi-billion unconditional cash transfer program.

Finance Secretary Paola Alvarez and presidential spokesperson Harry Roque have said legislative action is needed for the TRAIN law to be suspended since the executive branch has no power to halt the implementation of any law.

Alvarez added the tax reform law has only a 0.4 percent impact on inflation.