MANILA -- With self-rated poverty and hunger going down, the Department of Finance (DOF) remains confident to hit the target of bringing down poverty rate from 22 percent to 14 percent by 2022.
“Yes because as we already started, the surveys actually show that the self-rated poverty and hunger is going down,” DOF Assistant Secretary Paola Alvarez said in a Palace press briefing.
The uplifting of some six million Filipinos from poverty is one of the visions of the Republic Act No. 10963 Tax Reform for Acceleration and Inclusion (TRAIN).
TRAIN is the first package of the comprehensive tax reform program (CTRP) envisioned by administration of President Rodrigo Duterte to correct a number of deficiencies in the tax system to make it simpler, fairer, and more efficient.
DOF data show that the TRAIN made a direct impact on the prices of only a limited category of goods --non-alcoholic beverages, tobacco, electricity, gas, and other fuels, and transportation -- which was felt in the first quarter.
It said TRAIN pushed up inflation by only 0.4 percentage point, lower than DOF estimates of 0.7 percentage point. Other factors, such as the rise in global oil prices and the better collection of cigarette excise taxes drove inflation to 4.5 percent in April this year.
The funds to be collected from TRAIN law implementation will be used for infrastructure projects under Build, Build, Build program as well as education, healthcare and other social grants.
Alvarez said the government has to invest more on education.
“We think that the basis for you to reduce poverty is, number one, to increase education. This is primordial because one of the things that investors are looking at a country is the people or its work force,” she said.
At present, Alvarez said the country has a higher percentage of young people that need to be given proper education.
“These are the steps that we want to take, so we push the TRAIN to help us fund them, in the long run, our target of reducing poverty would be achieved,” Alvarez said.
According to a recent Social Weather Stations (SWS) survey, self- rated poverty decreased to 29 percent in the first quarter of 2018 from 35 percent in the same period last year, while the incidence of hunger among families also fell to 10 percent from 16 percent in December and 12 percent in the first quarter 2017.
Meanwhile, Alvarez expressed optimism that the lawmakers will pass the second package of CTRP which aims to rationalize fiscal incentives.
She said the target of the government is to decrease the corporate income tax of Small and Medium Enterprises (SMEs)
“If you look at it, your population is bigger than (SMEs) and it's unfair that they are paying a higher income tax as compared to bigger companies with incentives,” she said.
Alvarez clarified that the government will not remove all the fiscal incentives but to “make them time bound, efficient, transparent and target-based.
“So what do we mean here? We want you once you've got that investment, then, not forever your incentives, you should contribute to the government,” she explained.
She assured that government will be transparent with all the fiscal incentives that it will give to the “type of corporations that we went to give incentives”.
Alvarez said the DOF is having healthy discussions with the lawmakers, hoping it will be passed within this year.
“We are still optimistic, since we are already in the committee level and we are having healthy discussions regarding the bill,” she said. (PNA)
