This was among the warnings aired by various groups which simultaneously issued yesterday statements citing various adverse effects of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
Their bottomline: the controversial tax measure will hit mostly the poor.
In a statement, Kilusang Magbubukid ng Pilipinas (KMP) noted that “the new excise tax on oil products will result to a minimum 20 percent additional cost in the use of fuel-run farm equipment.”
“Farmers will have to shell out more money out of their pockets for the added cost on production brought about by TRAIN. 2017 prices of diesel average at P33 per liter. Now, diesel prices have gone up to at least P40 per liter. Cost of fuel prices are higher in the provinces,” it said.
KMP cited its “sample case study” showing that “a rice farmer in Bulacan province tilling one hectare of rice land will have to shell out additional P294 per hectare per cropping for the use of mechanized hand tractor to pull and harrow rice lands during land preparation. This does not include added cost for the use of water pump for irrigation, use of dryer, payment for rice milling, transportation of rice produce and other daily expenses.”
“According to government data, the country has four million hectares of rice harvested lands. This minimum sample computation would translate to a P1.176-billion additional cost for land preparation alone KMP noted. Other farm inputs such as seedlings, fertilizer, pesticides are also expected to increase. Food prices and commodities will increase too under TRAIN.
KMU warned that “this situation will have a domino effect on rice prices. Rice marketers and retailers are also expected to pass on added cost to consumers, resulting to hike in rice prices. We see prices of commercial rice increasing up to as much as P58 to P60 per kilo at the minimum in the coming months,” KMP chairman Danilo Ramos said.
The current average price of commercial rice in retailers is P50 to P55 per kilo. NFA rice price averages P38 to P40 per kilo.
Ramos warned that TRAIN “will severely affect rice farmers and threaten the country’s rice production and food security.”
“TRAIN will definitely wreck our livelihood and drive us into a state of hunger,” he said. Ramos also said
“TRAIN will cause worsening hunger among the poorest of the poor. Whatever minimal gain that low to middle employees will get from TRAIN will be easily offset and swept by rising prices of commodities, services and public utilities.”
Sugar workers
For the Unyon ng Mangagawa sa Agricultura (UMA), TRAIN “will surely lead to further impoverishness of sugar field and mill workers.”
“In the first place, the more than 780,000 field and 25,000 mill workers in the sugar industry are already exempted from paying income tax and would not benefit from TRAIN. This is especially true for the former, who only earn an average of P50,000 annually or around P4,000 per month,” UMA said in a statement.
This, even as Anakpawis Partylist Rep. Ariel Casilao said fuel prices to be triggered by TRAIN “will clearly trigger shocking impact on prices of other commodities that will end up affecting the poor sectors.”
Casilao cited studies indicating that TRAIN “worsen the tax burden on the 60 percent of the poorest with 2.3 percent or P47 billion of their gross income of P2.1 trillion, while the 40 percent richest with gross income of P4.1 trillion will only be burdened with 0.8 percent at P48 billion.”
Meanwhile, UMA warned of crisis in the country’s sugar industry as a result of TRAIN.
“In the first place, the more than 780,000 field and 25,000 mill workers in the sugar industry are already exempted from paying income tax and would not benefit from TRAIN.
This is especially true for the former, who only earn an average of P50,000 annually or around P4,000 per month, “ UMA said in its statement.
It said TRAIN will “will lower the consumption of sugar, which will further decrease sugarworkers’ already low wages.
This may even lead to dismissal from their jobs especially in the next cropping season starting October this year.”
UMA said “TRAIN is just one of the many neoliberal policies followed by Duterte and previous governments that favor the interests of big foreign businesses over those of the Filipino working people.”
“TRAIN was recommended by the Partnership for Growth (PFG) of the US with the Joint Foreign Chambers of Commerce (JFCC) to the US-Duterte regime. This to make a comprehensive tax reform in order to lower the corporate income tax and individual taxable income, while increasing the VAT, ACT (alcohol, cigarretes and tobacco), and fuel excise tax. It would lower or take away small taxes and other fees that increase the costs of businesses,” UMA also said.
UMA recalled that “last year, even hacienderos planting sugarcanes experienced losses due to the entry of High Fructose Corn Syrup (HFCS) into the country. These were used primarily by softdrink giants, Coke and Pepsi, causing the price of sugarcane to go down.”
“From January to July 2017, the Philippines also imported 132 million liters of bioethanol from the US, an increase of 25 percent during the same period in 2016. Majority of the latter up to now is still imported from the US even if it can be produced locally from sugar and mollasses, “ UMA noted.
