1 With the 99: Tax Reform DOF Usec.

Karl Kendrick Chua

The Comprehensive Tax Reform Program (CTRP) is needed to accelerate poverty reduction and

to sustainably address inequality, in order to attain the President’s promise of tunay na

pagbabago. By making the tax system simpler, fairer, and more efficient, additional – and a more

sustainable stream of – revenues will be generated to make meaningful investments in our people

and infrastructure, which will help achieve our vision for the Philippines.

This Tax Reform Program wants to eradicate poverty in the country once and for all. No tax

reform means – a) the poor will likely remain poor, there will be no significant investments in

infrastructure, education and health that will help uplift the lives of the poor; b) far less budget

for infrastructure projects such as badly needed farm to market roads and irrigation that will

surely help our farmers to market their products directly to the market without any further delay

and transportation costs; c) little improvements in public transportation, more time in traffic, less

productive people, less time for loved ones as urban congestion remains a challenge; d) poor

quality education pervades, classrooms will continue to be cramped and teachers overworked

hampering learning potential, especially that the past administration has passed the K-12

program and such program needs funding and the government needing more than 100, 000

classroom to be built and hiring 200,000 new teachers; e) quality health care escapes the poor in

which the poor are likely to get sick and not be attended well, draining their income and chances

of succeeding and this requires more than 15,000 barangay health centers and over 200,000 new

health workers to the countryside. These are the major problems that the government sees if

there’s no tax reform. Why is there a need for a tax reform? Our old tax code which was the

National Internal Revenue Code of 1997 was inequitable, complex and inefficient. It has

loopholes wherein taxpayers can easily find means to avoid paying taxes or lowering their taxes.
It was inequitable because people are taxed unjustly – even the minimum wage earners were

taxed. Therefore, our government, wanting to solve these problems, came up with a tax reform –

a tax reform that’s all about investing in our future. We are to take off from the ship that has

been rather unstable for many decades in the past and they would like the tax reform to address

poverty once and for all.

By 2022, they wanted for the Filipinos – a) reduce poverty rate from 22% to 14%, which

translates to some six million Filipinos lifted out of poverty; b) realize a law-abiding country; c)

achieve peace within the nation and with our neighbors; and d) graduate to upper middle-income

status. Reducing poverty rate in the Philippines is an ambitious goal. It’s not that we can’t,

maybe we can, but I think this dream is in the far future. We can’t easily reduce poverty rate.

Poverty has a lot of factors one is unemployment. Before we can really address poverty, we must

first the root of it – what is causing poverty in our country, and until then can we really address

the problem on poverty. Having a tax reform may or may not address it directly or indirectly but

reducing its rate as one of the goal of the reform, it seems to be a vague picture. The poverty line

today is P60 per person a day and they would like to eradicate totally poverty in one generation

or by 2040 – this is their Ambition Natin 2020. They wanted the country to graduate from the

low-income country status today to an upper middle-income status by 2022 and onwards

becoming a high-income country where no one is poor in one generation. The Philippines is

historically a Third World Country and currently a developing country. The GDP per capita is

low and the infant mortality rate is high. Many of our citizens lack access to health care and

higher education as well according to the UN Development Data. As a third world country, it

will take longer for us to achieve these goals. There are a lot of problems that needs to be

addressed and to provide solutions to these problems.

The Tax Reform, Acceleration and Inclusion (TRAIN) is an important reform as it aims to make

our tax code to be fairer, simpler and more efficient. TRAIN has four major components – a)

lowering of personal income tax; b) expansion of VAT; c) increase in oil excise; and d) increase

in automobile excise. According to Usec. Karl Chua, we are a country that has not adjusted our

income brackets for 20 years and we are a country committed to ASEAN Integration where tax

rates are falling below 25%. That is why we will return to the people what they deserve for all

their hard work in the last 20 years in the form of lower income taxes. We really need to see the

tax reform as a package because that is when 99% of Filipinos will benefit not because we only

like one tax and do not like the other. We need to see it as a package.

The tax reform program aims for the betterment of our country and for the good of Filipinos. It

has laid out great ideas for and goals that are surely to uplift the lives of the Filipinos. But why

does it seem that the opposite is happening – the poor becomes poorer. Is this another “the end

justifies the means” of the government wherein the process or the journey doesn’t matter as long

as at the finish line, we have reached our goals. It may be true that the tax code have become

simpler in its computation but have it really become fairer and efficient to every Filipino? The

answer is right in front of me but because of the sugar coated words about it, holding on the

beautiful promise, blinding me from its side effects that are giving a hard time to my fellow

Filipino.

They said that we have to view the tax reform as a package and we must view it through its net

incidents. As if they are saying that the end will justify the means. Through the sugar coated

words, it has been made to believe that this tax reform will uplift the status of our country – it

may or may not though. While they presented a lot of pros of a no tax reform and showed the

cons of a tax reform with the current situation of our country and according to some studies and
researches about the tax reform, its implementation may have worsened the plight of lower-

income households.