The Tax Reform for Acceleration and Inclusion (TRAIN) program being pushed by the Department of Finance (DOF) is anti-poor/pro-rich, reflective of the neoliberal thrust being pursued by the economic planners and technocrats within the administration of President Rodrigo Duterte. 

The Senate Ways and Means Committee proposed changes in order to shift the tax burden from the poor to the rich, as illustrated with their plans to lower sugar-sweetened beverage excise tax and retain value-added tax (VAT) exemptions on socialized housing, cooperatives, senior citizens, and persons with disabilities. However, the DOF exposed its anti-poor stance by quickly resisting such proposals and insisting on its initial proposal.

Meanwhile, the rich would pay more from higher taxes on interest income accrued from foreign currency deposits, dividends, and perhaps from re-bracketing automatic excise taxes. There will also be additional taxes on plastic bags, while the only change to the petroleum excise tax will be its phasing.

I agree with the IBON Foundation’s endorsement of the Senate version of the proposal, but it still does not do enough to change the inequitable and unfair character of TRAIN.

The most anti-poor aspect of the proposal increases consumption taxes on a population where a majority does not earn enough to make a basic living, while the most pro-rich aspect avoids implementing higher taxes on the wealthy.

According to IBON, in the Philippines, the monthly salary for the lowest income group range between P5,100 and P15,800; while the rich are earning between P303,000 and P6 million a month.

The tax system should not be a burden to the poor. There needs to be progressive taxation that should tax direct income and implement wealth taxes, placing more responsibility on the rich – they have so much more and can afford to pay more.

For all the president’s tough talk against oligarchs, it would be more advantageous for the poor if he takes more courage and determination to more correctly tax the rich./WDJ