In have to pay a lot more

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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 by economic expert Sonny Africa about the
government’s understatement of the effects of the newly passed bill. Africa
mentions two main points as his basis for his criticisms.


there will be an effect in terms of taxes and the inflation rate. Under TRAIN,
the inflation rate is predicted at around of 3-3.4% increase versus 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 like VAT, automotive tax, fuel tax, sugar,
tobacco and things like stamps or documents tax just to name a
few.(Collas-Monsod, 2018; Dela Paz, 
2018; Gialogo, 2018).


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 extra money due to the increased take home pay but with the tax increases,
the added 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)

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Calling the whole idea of reducing taxes “a
smoke screen” (Ballaran, 2018), Africa concludes with two suggestions to reduce
revenue loss. First, improve the gathering of corporate income tax and second,
increase tax rates for wealthy families since according to Africa, the tax
system should really be based on the differences in earnings and belongings of people”
(Ballaran, 2018).

Categories: Inflation


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