June 23, 2018, 10:20 am
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Good news and bad

FIRST, the good news. The Bureau of Internal Revenue (BIR) reported that a combination of higher rates and new levies resulted in P22.1 billion in excise taxes collected in January or 7.7 percent above target.

The higher collections were due to the Tax Reform for Acceleration and Inclusion (TRAIN) Act which the government started implementing on Jan. 1. The new tax legislation increased or slapped new excise taxes on oil, cigarettes, sugary drinks and vehicles, among other commodities to compensate for the restructured personal income tax rates that raised the tax-exempt cap to an annual salary of P250,000.

Next, the bad news. The products with higher excise taxes such as cigarettes and sugar-sweetened beverages are mostly consumed by low-income households, even persons without jobs, underemployed, and contractuals. They do not benefit from lower income taxes but they bear the brunt of the price increases.

Also, certain “retail merchants took advantage of the TRAIN law by raising prices prematurely,” according to Socioeconomic Secretary Ernesto M. Pernia.

Exacerbating the price situation is the almost stupid, inefficient handling by the National Food Authority (NFA) of their rice stocks, triggering the real shortage of low-priced NFA rice in the market, and the fake situation that the country suffered from shortage of the grain.

Pernia said the perceived shortage, and its concomitant panic generated among consumers, were unfortunately caused by “how the NFA handled its rice stocks.” He added that the rice agency “seems to be in disarray, and we have to do something on how the NFA (maintains) this buffer so there’s no considerable spike in the price of rice.”

If this artificial shortage in the nation’s staple food was caused by greedy businessmen controlling the rice cartel, then it is incumbent upon various government agencies such as the Department of Trade and Industry, even the police and the National Bureau of Investigation to intervene. After all, we have laws against economic sabotage.

Our government institutions should have anticipated the various problems that a major shift in taxation, such as the TRAIN, would engender.
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