Anti-poverty commission: Tax reform law will harm 21M poor Filipinos

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National Anti-Poverty Commission Secretary Liza Maza

Metro Manila (CNN Philippines, January 11) — Anti-Poverty Chief Liza Maza said the tax reform law will make it difficult for around 21 million Filipinos living under the poverty line.

"Hindi naman nagbabayad ng tax in the first place, so yung benepisyo na 'yun hindi mapapasakanila," Maza said in a Thursday forum. "At the same time, sa pagtaas ng presyo ng mga bilihin, tiyak na sila ay mabibigatan."

[Translation: The poor don't pay tax in the first place, so they won't benefit from the law. At the same time, as the prices of goods go up, they will certainly be burdened.]

The tax reform law took effect on January 1.

It exempts those earning up to P250,000 annually from paying taxes, including self-employed individuals. The bill also exempts 13th month pay and bonuses amounting to P90,000 from taxation.

However, the bill hikes taxes on coal, fuel, liquefied petroleum gas and sugary beverages.

Read: Lower income tax, higher taxes on sugar, petroleum, tobacco products by 2018

Maza said although she is against the law, the commission's role is limited to merely monitoring the law's impact on the poor.

The National Anti-Poverty Commission (NAPC) oversees, monitors and recommends policies to help the poor, including providing financial and non-financial incentives to local government units to implement poverty-alleviating programs.

How to cope?

Bemar Harabe, a 25-year-old construction worker, is struggling to make ends meet for his family.

He earns around P400 a day, living from hand to mouth.

As a father of two — a three-year-old toddler and a four-month-old baby — Harabe has to spend more on food and other daily necessities.

He said he does not know how his family will cope with price increases on basic commodities due to the tax law.

"Sa ngayon nga, kinakapos na eh kasi ang kita P400 lang isang araw," he said. "Minsan, wala din kaming overtime. Kukulangin talaga. Mangungutang na lang po."

[Translation: As of now, I don't make enough from my P400 a day. Sometimes, we don't get overtime pay. It really won't be enough. I need to borrow money.]

'Minimal' price change

Trade Secretary Ramon Lopez said on January 4 the tax reform law will have "minimal" changes to food prices.

Read: Trade chief: Effect of tax reform on basic goods' prices 'minimal'

"Sa mga nananakot na tataas ng dalawang piso, limang piso, wala ho. Punta sila sa mga key accounts. Maraming alternative. May tindahan na murang magbenta below SRP (suggested retail price)," Lopez told reporters during his visit to markets.

[Translation: Those who scare off consumers by saying prices will increase by two pesos, five pesos, there is no increase. They should go to key accounts. There are plenty of alternatives. There are stores who sell below the SRP.]

But non-profit IBON foundation believes even minimal price adjustments would be a big blow to the country's poorest.

"Tingin namin yung fundamental flaw ng (tax reform law), ang mas problema sa kanya, ay nakadisenyo siya na pagaanin ang kalagayan ng mayayaman habang mas pabigat sa maraming mahirap sa Pilipinas," said Sonny Africa, the foundation's executive director.

[Translation: We think that the fundamental flaw of the tax reform law, the bigger problem with it, is that it is designed to ease the burden on the rich while making the lives of many poor people in the Philippines more difficult.

As the effects of the tax reform law kick in, families like Harabe's brace themselves to survive.