Saturday, December 27, 2014

‘Tax the rich instead of raising MRT fares’

THE labor coalition Nagkaisa! on Friday demanded that the government take away the subsidies and tax perks from the rich, such as the P5.2-billion subsidy for the power industry and five to seven-year tax holidays for local and foreign corporations, if it wants to save P2 billion in subsidies by imposing fare increases in the MRT and LRT.

Partido Manggagawa spokesman Wilson Fortaleza said removing the P7-billion to P10-billion annual train subsidy to free up money amounting to P2 billion for other social services was a fallacious argument, saying the poor, who are entitled to government subsidy in varying degrees, should not, by class or geographical location, be pitted against each other.

"This is comparable to the fact that businesses across all industry also enjoy billions of pesos of subsidy in the form of tax holidays, financial assistance, free repatriation as well as import and export privileges," said Fortaleza whose PM belongs to Nagkaisa! coalition.

He said the power industry, the most lucrative business in the country today, received a total of P5.2 billion in subsidy in 2012 based on the 2012 Census of Philippine Business and Industry.

He also cited the seven-year tax holiday granted a Thai-owned firm for putting up a P2- billion hogs and poultry business in the country, prompting local producers and growers to complain that the domestic hogs and poultry industry was being killed by big foreign corporations.

Fortaleza reiterated his group's position that it is more productive to provide an annual subsidy to the estimated 500 million rides of blue-collar workers and students who use the trains regularly than the luxurious lifestyles of 500 public officials.

The Bagong Alyansang Makabayan and the commuters' groups RILES and TREN are set to question the MRT-LRT fare hike on Jan. 5, a day after the rate increase is enforced by the government.

"We will question the basis for the increase, the authority of the agencies who approved the hike and the process by which the increase was upheld," Bayan secretary general Renato Reyes Jr. said.

He exhorted the public to support their initiative especially in seeking a temporary restraining order and massive street protests.

"We call on commuters to support this initiative by joining the various protest actions leading up to Jan. 5 and beyond. It is callous on the part of the regime to announce the hike during the holidays and implement it during the visit of the Pope. This period of joy and hope is dampened by the prospect of greater burdens on the poor," Reyes said.

"For that, let the world see the heartless, anti-people government that we have. And let the world know that the Filipino people are resisting its unjust impositions."

Nagkaisa!, for its part, likewise bewailed the huge revenue losses coming from tax evasion and smuggling, saying the failure to address this age-old problem had created a "pass-on" culture in public policy.

"This is the reason why the burden shifted heavily to indirect taxes like Value Added Tax and taxes withheld from wage earners.  At the same time, smuggling creates abundance of cheap imported goods at the detriment of local producers. And now the removal of subsidies," Fortaleza said.

He said smuggled goods had no local labor components, which was both a revenue and job loss to Filipinos.

He said PM supported the view of Senator Allan Peter Cayetano that unless trillions of pesos of lost revenue due to smuggling, tax evasion and official corruption was plugged, the removal of MRT/LRT subsidy would be painfully and socially unjust.

"Subsidy is a good social policy.  It is a right, an entitlement of poor people while corruption and fraud are privileges enjoyed by the rich and powerful.  By removing the subsidy, the government is renouncing a good policy," Fortaleza said.

Quoting the World Bank, Cayetano said for every P1 collected by the government, P2 remained uncollected. This was estimated to be between P2 to P4 trillion of lost revenue or bigger than the recently approved budget of P2.6 trillion.

Cayetano said he would take up this issue next year amid the plan by the government to remove the subsidy to the metro rail system. The plan would double the MRT and LRT fares beginning Jan. 4.

Fortaleza said the coalition Nagkaisa! will be meeting next week to draw up plans against the impending fare hike. -  By Christine F. Herrera / Manila Standard Today

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