Higher subsidy for poor sought under proposed tax reform

Leyco said they are discussing with the Department of Finance (DOF) how the subsidy would be given to the 10 million poorest households once the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) or House Bill No. 5636 becomes a law. (Photo: Department of Social Welfare and Development/ Facebook)

MANILA— While the Department of Social Welfare and Development (DSWD) supports the plan under the proposed tax reform measure to provide subsidy to 10 million poorest households who will be affected by the rise in excise taxes on fuel and other products, a monthly subsidy of PHP200 is not enough, its chief said Wednesday.

“Ang mungkahi namin, from PHP200 dagdagan pa siguro, PHP500, PHP400 or PHP300. Nakikita namin na di sapat gamitin lang ang inflation rate as basis (Our suggestion is to increase the proposed subsidy from PHP200 to PHP500, PHP400 or PHP300. It is not enough to use only the inflation rate as the basis for determining the amount of the subsidy),” DSWD officer-in-charge, Undersecretary Emmanuel Leyco, said in an interview with the Philippine News Agency (PNA).

He said the price index protocol should also be considered in calculating the subsidy.

Leyco said they are discussing with the Department of Finance (DOF) how the subsidy would be given to the 10 million poorest households once the proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) or House Bill No. 5636 becomes a law.

Included in the 10 million are the 4.4 million household beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps).

Meanwhile, Leyco assured that the department will abide by the law.

“The DSWD will be prepared to implement whatever the law states. As a government agency, we are mandated to support the government,” he said.

According to the DOF, the TRAIN aims to make the country’s tax system simpler, fairer and more efficient, especially for the poor and low-income families, by making sizable cuts in personal income tax rates, expanding the Value Added Tax (VAT) base and adjusting excise taxes on oil, automobiles and other products to help sustain the country’s growth and reduce poverty through massive spending on infrastructure, human capital and social protection for the poor and vulnerable sectors.

Budget Secretary Benjamin Diokno has said that there will be an unconditional cash transfer of PHP200 per month or PHP2,400 a year, which will benefit the 10 million poorest households in the country.