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In the
article “Economic expert warns Train can deliver negative effects to economy”
(2018 Jan. 06, Inquirer), J.Ballaran 
reports on the criticisms given by economic expert Sonny Africa,
regarding the government’s understatement of the effects of the newly passed
bill. Africa mentions two main points as his basis for his criticisms against
the government minimalizing the effects of the bill.

 

First,
there will be an effect in terms of taxes and the inflation rate. Under TRAIN,
the inflation rate is projected at a range of 3-3.4% increase compared to the
usual inflation of around 1.78% (De Vera, 2018). There is a decrease in income
tax but there is an increase in other taxes such as VAT, automotive tax, fuel
tax, sugar and tobacco and even things like stamps or documents tax just to
name a few.(Collas-Monsod, 2018; Dela Paz, 
2018; Gialogo, 2018).

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The
effects that were mentioned paint a picture for Africa’s second point: how the
poor people are affected a lot in the process since they are now required to take
responsibility for the losses in government earnings (Ballaran, 2018; Orellana,
2018). This severely affects the poorer side of the population because they may
have some extra money due to the increased take home pay but with the increase
in all other areas, the additional pay is no longer felt since they have to pay
a lot more now for their needs (Collas-Monsod, 2018). For those above the
poverty line, the increases in various tax offers little flexibility (even
restricts) in terms of purchases and possible ways to spend their extra money.
(Dela Paz, 2018)

 

Calling the whole idea of reducing taxes “a
smoke screen” (Ballaran, 2018), Africa concludes with two suggestions to reduce
revenue loss which are to first, improve the gathering of corporate income tax
and second, increase tax rates for families of more privileged backgrounds
since according to Africa, the tax system should really be based on the
difference in terms of earnings and property or belongings of the people
(Ballaran, 2018). 

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