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).

 

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 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).