Rough Cuts | Left in the air by the TRAIN

MANY of the country’s leading economists, one of them former National Economic Development Authority (NEDA) Director General and UP economics professor Solita Colas “Wennie” Monsod, are known to be supportive of the Tax Reform Acceleration and Inclusion (TRAIN) Law. This is because they know that taxes are the lifeblood of the government for it to be able to fund the delivery of various social services to the people.

Their support to the TRAIN law however, is premised on the government’s commitment to provide some kind of financial subsidy to the marginalized sector of the population who are to be the most adversely affected by the TRAIN law even as they do not stand to enjoy any benefit in its implementation.

It has to be noted that under the new tax law, the low-income earners who are actually the bulk of the poor sector of the country’s population will not anymore be paying taxes from out of the income they earn in any given year.

Such provision in the law appears to be largely beneficial on the surface. But how can it positively impact on the poor when most of them do not have permanent source of income or no income at all? And if those who are permanently employed are receiving just the minimum daily wage, they are already exempted from income tax deduction in their salaries and wages under the pre-TRAIN tax law. Therefore, they cannot get anything beneficial from the new tax system being implemented starting this year.

But even with this knowledge, however, the country’s economists are saying that they still support the TRAIN because under the law, the poor sector of the population will be given an annual financial subsidy of P2,600 or roughly a little over P200 a month and released on a quarterly basis.

According to economist Monsod or Mareng Wennie during an interview segment of a news and public affairs program “Unang Hirit” over GMA Television Network last Thursday morning, the unconditional cash assistance from the government was due to be released during the close of each quarter starting the first quarter of this year.

She told GMA television audience that the measly amount of cash is intended to tie the poor over as the surging inflation rate starts impacting on the bottom half of the country’s poor population. The bloating of the inflation is the percentage of the increases in the cost of goods such as food and other household requirements brought about by the implementation of the TRAIN law. As of March this year the inflation rate was at 5.2 percent, according to a document shown by Monsod on television.

She further added that she had checked with the Land Bank, the lead conduit of the financial subsidy, whether the release of the cash assistance has already been done. She was informed that no such unconditional cash assistance release has been made. Monsod also told her television audience that her inquiries with the Department of Finance (DoF) regarding the release of the first trance have not been honored with an answer. So, Ms. Monsod is claiming that she is at a loss as to what really is the status of the much ballyhooed cash assistance to the poor that is to be sourced from a P24 billion fund already included in the 2018 national budget.

Yes indeed. What is holding the government from releasing the acutely needed cash assistance to the poor who are already staggering from the impact of the TRAIN law? Why has the government reneged on its commitment to release the unconditional cash support starting the first quarter of this year?

Or, shall we say that while it appears that the cash assistance mandated by the TRAIN law has not required any condition to be met by the supposed beneficiaries, the government just decides for itself that it could not obligated to comply with its commitment as to the schedule of the release?

There is no doubt that those who are in the upper social bracket of the Philippine population — the so-called “lucky ones” — are now enjoying the benefits of the TRAIN law. Primarily, they derive their enjoyment in the form of reduced corporate income taxes for those engaged in businesses, and the increase in the salary bracket that is now subject to income tax exemption among wage earners receiving high salaries and bonuses.

Indeed there should be concerted efforts by the affected sector in order to bring to the consciousness of appropriate government officials their apparent deliberate negligence in working for the release of the cash assistance as scheduled.

The high cost of prime commodities was already prevalent in the country even before that implementation of the TRAIN law, the same law that the businessmen cited then as the basis of their unilateral hiking of prices. Today prices of prime commodities are even jumping like kangaroos so much that these are already beyond the reach of the poor.

And talking of the non-release of the unconditional cash assistance to the poor affected by the TRAIN law, we are already suspecting that the additional P1000 due the Social Security System (SSS) pensioners will suffer the same fate – buried in oblivion.

The second P1,000 of the P2,000 approved hike in SSS monthly pension was expected to be released as early as last January or February as committed by the government. It’s already April and seemingly not even a shadow of that P1,000 can be seen so far.

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Posted in Opinion