MANILA, Philippines – The middle class is sure to bear the brunt of higher taxes on automobiles coupled with the country’s poor transportation system.

Senators Sherwin Gatchalian and Juan Edgardo Angara raised this issue on Wednesday, August 2, during the Senate hearing on excise taxes on automobiles.

For Gatchalian, the scheme is a “lose-lose” scenario for middle-class Filipinos.

“I think lahat naman tayo nag-a-agree na itong sasakyan, most of these middle-class, middle-low ang bumibili. If you ask anyone, if you do an informal survey, ‘yung mga tao bumibili ng sasakyan dahil bulok ang mass transport system,” Gatchalian told Finance Undersecretary Karl Kendrick Chua.

(I think we all agree that these cars, most of these are bought by middle-class or middle-low citizens. If you ask anyone, if you do an informal survey, people buy cars because of the poor mass transport system.)

“This is, for the middle class, a lose-lose situation on their daily activities, commuting to work. I just want to manifest because the DOTr (Department of Transportation) is giving us false hopes in fixing the mass transportation system,” he said.

Gatchalian questioned why 42 Metro Rail Transit Line 3 (MRT3) coaches remain unused after almost two years now. This, he said, leaves the public with limited options.

“It’s discouraging, until now 42 bagon na binili ‘di nagagamit. If one of the reasons we’re doing this is to decongest streets, minahalan mo sasakyan, ‘di inayos mass transit, kawawa dito commuters natin na ang puwede na lang nilang gawin para guminhawa ang buhay ay bumili ng sasakyan,” Gatchalian said.

(It’s discouraging that until now the 42 MRT coaches which were bought are still not being used. If one of the reasons we’re doing this is to decongest streets, but you make cars expensive and you don’t fix the mass transit system, the commuters will be on the losing end here, commuters who have no option but to buy cars so their lives would be easier.)

Under the DOF proposal, personal income tax will be reduced but higher excise taxes will be imposed on fuel, automobiles, and sugar-sweetened beverages.

Earmarking for transport projects

Angara shared Gatchalian’s view, saying it’s one of the reasons why the public is apprehensive in paying new taxes.

“Kaya ang mga tao nanghihinayang sa pagbabayad ng bagong buwis kasi wala sila nakikitang gumagana, pag-improve sa sitwasyon sa transportasyon,” Angara said.

(That’s why people are hesitant to pay new taxes because they’re not seeing anything working or any improvement in transportation.)

Angara and Minority Leader Franklin Drilon called on Malacañang to earmark revenue from auto taxes for projects improving the country’s public transport system, such as fixing railways and subsidizing the modernization program for jeepneys.

Under House Bill 5636, 60% of the yearly incremental revenues from the Tax Reform for Acceleration and Inclusion (TRAIN) Act “shall be allocated proportionally, based on existing budget allocation, for infrastructure, health, education, housing and social protection expenditures. Provided, that the infrastructure allocation shall be prioritized to address congestion through mass transport and new road networks.”

But Angara said the language is very generic and would not institutionalize the allocation of funds for public transportation.

“You really have to explain to the people why you’re taking money from their pockets. Let’s make the tax reform bill complete in itself – from finding ways and means for funding to the spending of the money,” Angara said.

With the vague language, Drilon said the power to allocate funds would be left with the Department of Budget and Management.

The senators then asked the Department of Finance to submit a list of transportation projects that could be funded by additional auto taxes. – Rappler.com