BAYAN MUNA: SAVINGS FROM VAT EXEMPTION ON MEDS MIGHT BE WIPED OUT BY 2ND TRANCHE OF EXCISE TAX ON OIL
Bayan Muna chairman Neri Colmenares and Bayan Muna Rep. Carlos Isagani Zarate today said that the supposed savings to be gained by the TRAIN law’s exemption of value added tax (VAT) for diabetes, hypertension and high cholesterol drugs could just be easily wiped out by the second round of additional excise taxes to be imposed on oil and petroleum products this January.
“Just like how last year’s cuts in personal income taxes were wiped out by higher prices due to increased taxes on oil, sugary drinks and other goods and services, so too might the benefit of the tax cut on maintennance meds be made insiginificant by the next round of excise tax hikes on oil and petroleum products,” said Colmenares.
“In this light, we urge the Department of Finance (DOF) to continue with their earlier plan to suspend the 2nd round of oil tax hikes scheduled for 2019. Otherwise, para kang binigyan ka ng kakapiranggot sa isang kamay tapos ay kinuhanan ka naman ng napakalaki ng kabilang kamay,” he said.
“The decision of the DOF to push through with the second tranche of the oil excise tax increase this January will surely jack up prices anew, given the multiplier effect of oil prices on power, transportation and other basic goods and utilities. We felt it last year and we will feel it again next month despite the DOF’s state of denial” added Colmenares.
“The DOF is making the same mistake as it did when it said the first tranche would have a minimal impact on inflation. This year the country reached its highest inflation rate in nine years,” stressed the former lawmaker.
Rep.Zarate meanwhile said that “the Duterte administration is again gambling with the prices of goods with their continued implementation of the TRAIN law and it would definitely hit consumers hard with price shocks,”
“When oil prices in the international market begins to increase due to heightened demand and reduced production then oil prices in the country would again jack up. Let me also remind the administration that this would hit during the election period and voters would also hit back by junking the administration bets,” ended Rep.Zarate.
Colmenares and Rep. Zarate are petitioners in the pending case before the Supreme Court questioning the legality and consitutionality of the TRAIN Law. ###