Tax Reform will have minimal effects on commodities - DTI

Arem V. Bolalin | January 9, 2018

On an interview with Radyo Inquirer 990 AM on Friday, the Department of Trade and Industry (DTI) Secretary Ramon Lopez said that the Tax Reform for Acceleration and Inclusion (TRAIN) law would have minimal effect on the prices of prime commodities.

Moreover, he also said that the percentage of fuel hike will only be up to 7-8%, is usually being multiplied, and he also include that fuel consumption on production cost of the products takes a little portion.

“So pag sinuma-total yan ang specific example natin ay yung presyo ng de lata sardinas ay P14. Dun sa mga ganung halaga ang epekto niyang fuel increase na yan ay singko sentimos lamang. So normally pag ganyan ‘di na ina-adjust ang SRP niyan,” he added.

“Mga around 90 percent ng ating mga manggagawa ay nagsu-sweldo ng P21, 000 and below, so ito po malaking ganansiya dahil exempted na sa tax, so yung take home pay nila maiuuwi na nila lahat at yung dating tina-tax na around P6,000 to P7,000 maiuuwi na rin nila ngayon at ang mga presyo naman ng mga pangunahing bilihin ay wala ho tayong inaasahang pagtaas dahil base po sa computation ay hindi po talaga tataas.” Lopez said.

Amidst the growing fears and concerns over the effects of the TRAIN law, DTI Secretary Ramon Lopez explained that the effects of TRAIN law on prime commodities would be minimal, Lopez said prices of goods should not increase yet as there are still old stocks available in the market before the law was implemented.

He said manufacturers spend only less than 5 percent of the cost to transport their products and based on their estimates only 0.4 percent increase in total production costs of manufacturers would be felt due to the effect of higher excise tax on petroleum.

As a result of the recently approved Republic Act No. 10963 or tax reform law, diesel gets an excise tax of P2.50 per liter from zero while the excise tax on gasoline increases to P7 from P4.35 in the first year of implementation.

The department will also have strict monitoring on price movements and adjustments of groceries on Suggested Retail Prices or SRP.

As of now, there are 70 teams monitoring in NCR and in provinces and doing price watch to ensure that no unusual price movements will occur.