In predicted at around of 3-3.4% increase compared to

In the
article “Economic expert warns Train can deliver negative effects to economy”
(2018 Jan. 06, Inquirer), J.Ballaran 
reports on the criticisms by economic expert Sonny Africa, about the
government’s understatement of the effects of the newly passed bill. Africa
mentions two main points as his basis for his criticisms against this
statement.

 

First,
there will be an effect in terms of taxes and the inflation rate. Under TRAIN,
the inflation rate is predicted at around of 3-3.4% increase compared to the
usual inflation of around 1.78% (De Vera, 2018). There is a decrease in income
tax but there is an increase in other taxes like VAT, automotive tax, fuel tax,
sugar, tobacco and things like stamps or documents tax just to name a
few.(Collas-Monsod, 2018; Dela Paz, 
2018; Gialogo, 2018).

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

 

The
effects that were mentioned paint a picture for Africa’s second point: how the
poor people are affected a lot in the process since they are now required to take
responsibility for the losses in government earnings (Ballaran, 2018; Orellana,
2018). This severely affects the poorer side of the population because they may
have some extra money due to the increased take home pay but with the increase
in all other areas, the additional pay is no longer felt since they have to pay
a lot more now for their needs (Collas-Monsod, 2018). For those above the
poverty line, the increases in various tax offers little flexibility (even
restricts) in terms of purchases and possible ways to spend their extra money.
(Dela Paz, 2018)

 

Calling
the whole idea of reducing taxes “a smoke screen” (Ballaran, 2018), Africa
concludes with two suggestions to reduce revenue loss which are “to first,
improve the gathering of corporate income tax and second, increase tax rates
for families of more privileged backgrounds since according to Africa, the tax
system should really be based on the difference in terms of earnings and
property or belongings of the people” (Ballaran, 2018).