By Bernie Cahiles-Magkilat
Consumer advocacy group Laban Konsyumer Inc.(LKI) yesterday asked the Supreme Court to strike down the newly implemented Tax Reform for Acceleration and Inclusion (TRAIN) Law for being unsconstitutional, causing unwarranted increases in basic goods and services, and inflicting the hardest impact on poor families.
In a 43-page Petition for Certiorari with Application for Temporary Restraining Order, Writ of Preliminary Injunction and/or Status Quo Ante Order, filed before the Supreme Court on Monday January 22, 2018, LKI prayed that the TRAIN Law should be nullified as it negatively affects millions of Filipinos consumers, particularly those from the low-income and poor families.
Atty. Vic Dimagiba, LKI President and former Trade and Industry for Consumer Protection Group, said the TRAIN Law violates the Constitution which prescribes that taxation must be equitable and progressive. The TRAIN Law also violates the due process and equal protection of the law provisions of the Constitution, the rules on the origin of revenue laws, and the rules on quorum.
The TRAIN Law imposes higher excise taxes on coal, diesel, liquefied petroleum gas (LPG) and kerosene, which form part of basic commodities: i.e. coal for electricity and cement manufacture, diesel for transportation and power, LPG for food and transportation, kerosene for cooking and other products and services.
“These commodities are necessary for subsistence since all Filipinos, rich and poor, have no choice but to avail and consume these commodities regardless of their cost. Thus, the provisions in question should be struck down as they impose a heavy burden on Filipinos from low-income and poor families, who make up the majority of our population,” said Dimagiba.
LKI took the position of the Filipino consumers because “if not restrained now and later nullified, the provisions of the TRAIN Law betray the very purpose for its enactment which is to provide, as much as possible, an equitable relief to a greater number of taxpayers and their families in order to improve the levels of disposable income since a tax on staples is a tax on the right of individuals to live.”
Dimagiba further pointed out that “the TRAIN Law with its provisions authorizing the increase in excise taxes on kerosene, diesel, coal and LPG will only equalize any possible gains of the rationalization of personal income taxes, or worse, further beset those belonging to the poor and low- income families. Whose resources are extremely finite.”
Dimagiba also challenged the inequity of the revised personal income taxation scheme as benefiting only the higher income bracket of taxpayers at the expense of those earning P250,000.00 and below. In this connection, Dimagiba said that persons already earning high incomes should not be extended the tax-free bracket of P250,000.00. In the old taxation system, high income earners enjoyed personal exemptions of only P50,000.00.
LKI stressed in its pleading that it will not be the corporations or private interests that will actually bear the new taxes as these entities will only pass on the new impositions as additional charges on the prices of their products and services. Thus, the consumer group concluded, there is no hiding the fact that the increase in excise taxes will hit low-income and poor families the hardest.
LKI believes that the provisions of the TRAIN Law should be tested as to its reasonableness and propriety, particularly in relation to that segment of society whose voice, the group believes, have long been forgotten – the majority of Filipinos who have less in life. Dimagiba also called on the general public, especially to those who may not yet have fully understood the implications and reach of the TRAIN Law on their day to day expenses, to carefully scrutinize the provisions of the law and not be lulled into complacency by sweeping conclusions.
LKI voiced out the heavy burden that the TRAIN Law will put on the consumers’ shoulders, pointing out that apart from electricity prices rising, food, beverages, and services are seen to have price increases as manufacturers and retailers will also be affected by the higher power bills.
Even the even micro entrepreneurs will bear additional production expenses because of, among others, the imposition of the excise tax on coal, deemed unjust, regressive, and inequitable ,
considering that its largest negative impact on low-income and middle income families, he said.
According to Dimagiba, the law clearly violates the Bill of Rights on protection to due process and equal protection of the law stressing that the “1500 % increase in the excise tax on coal will unduly burden consumers who are low income and poor families.”