Tax Reform Law Affects Filipino Consumers

Tax reform is the process of changing the way taxes are collected or managed by the
government and is usually undertaken to improve tax administration or to provide economic or
social benefits. Our economy is currently not in its best state. Despite the good intention of the
tax reform, we cannot deny that many Filipino consumers suffer from continuously increasing
prices of basic commodities. One of the recurring problems that is being discussed when it comes
to the TRAIN law is the burden that it will impose to the poor. As crafted, the TRAIN promises to
let marginal earners and minimum salaried workers of smaller tax or even tax exemption. But
critics are quick to point out that the alleged windfall of tax-free income will be blown away when
basic commodities that the marginalized sector of society traditionally buy and consume every
day will now be sporting increased price tags that are out of reach and beyond the imagination
of poor families.
This is a serious problem that needs to be addressed urgently. It would be firm with
revenue-neutral stand by the Minority Leader of the House and would encourage its colleagues
to come up with measures that would manage the adverse effects of the TRAIN Law. For we will
continue to perform our oversight function to monitor the effects of TRAIN to ensure that it is
for the benefit of our country.
The rationale behind a revenue neutral tax reform scheme is that we need to strike a
balance between our spending and revenue generation through taxation. As we increase excise
taxes, the tendency is that prices of basic commodities also increase, wherein the cost is being
passed on to the consumers. In effect, this cancels out the increase in the take-home pay of the
taxpayers.

Reference:
Rao, S. (2014). Tax reform: Topic guide. Birmingham, UK: GSDRC, University of the Birmingham".
Retrieved 19 February2016.
'TRAIN' advocates and supporters are insensitive to the cries of the poor". Manila Bulletin News.
Retrieved 2018-07-15.