Positive effect of Tax Reform for Acceleration and Inclusion (TRAIN) law is not immediate but rather medium to long term.
Bureau of Treasury (BTr)-10 Officer in Charge – Regional Director Bienvenido V. Esmeralda Jr. explained during in Talakayan sa PIA on August 30, the passage of TRAIN law does not assure immediate positive effect but medium to long term. The immediate effect would be the increase in prices.
From the amount generated from this law, 70 percent will go to Build Build Build program which is a capital asset. “And you cannot feel today the benefit, this capital asset: bridges, roads, etc.,” he said.
“We cannot just collect today and spend tomorrow and we don’t see any infrastructure improvement,” he added.
Meanwhile, 30 percent of the collected funds from TRAIN go to social services.
BTr is the custodian of government funds. Esmeralda said collection of Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) will go to the treasury to fund the republic. If the government needs money, then we can provide, he said.
For 2018, the national budget is something like P3.4 trillion but estimated revenue is P2.8trillion so it is already deficit. He explained, if the 3.4 trillion will be spent, compared to the P2.7 trillion collections, the treasurer has to find somewhere, to fund the balance or the deficit.
We always borrow, he said.
In June 2018, national government debt reached P7.1 trillion. “Bisan pa sa budget programming, duna gyud deficit pirmi (Despite the budget programming, there is always deficit),” he said.
“For TRAIN, the target inflation was between 2-4 percent, but for the month of July we hit 5.7 percent that is over and above the inflation rate target,” said Esmeralda.
When price increases, he said, we cannot just blame TRAIN law because there are other factors.
Among them are rise of fuel price in the world market and depreciation of the PH peso. Once price of the fuel increase, there will always be effect to our basic commodities. (PIA10)