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MANILA – A tax reform bill passed by the House of Representatives will uplift instead of unnecessarily burden the poor, one of its authors said Thursday.
The measure seeks higher taxes on fuel and sweetened drinks in exchange for lower income tax rates. Militant groups fear the fuel tax could result in higher fares and food prices.
A P3 increase in fuel taxes on the first year, followed by P2 pesos and P1 on the second and third years, respectively, should not be enough to stoke inflation, said Quirino Rep. Dakila Carlo Cua, chairman of the House ways and means committee.
Citing a Department of Finance report, Cua said inflation in 2016 stood at 2.7-percent, despite a P12 cumulative increase in fuel prices.
“That’s because the market was able to absorb, some of that can be absorbed by the tracking company, the retailer. When competition is healthy, they are forced to just absorb these small hits,” Cua told ANC’s Headstart.
“If P12 is manageable, what more P6 spread over 3 years and the maximum is P3 in the first year?” he said, adding, “I was convinced that this plan of the President really is pro-poor.”
Citing another finance department study, Cua said a P3 per liter increase in diesel would have a P0.10 “effect” on fares. “It doesn’t amount to enough to increase the fares.”
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