DOF insistence on anti-poor tax package for free educ hit

August 31, 2017

by IBON Foundation

Research group IBON said that the Department of Finance (DOF) should not use free education as a pretext for the Philippine Senate to pass a full version of the administration’s anti-poor tax reform package. The group also said that the administration should instead decisively tax the country’s wealthiest for national development needs.

Finance secretary Carlos Dominguez recently warned that his department may ask the President to veto the Philippine Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) should it turn out to have been watered down. Dominguez further said that a watered down version will prevent government from raising enough amounts for government’s programs for the poor including free education. The Duterte administration plans to raise Php133.8 billion from TRAIN in 2018 alone.

IBON’s executive director Sonny Africa said that this is a crude tactic to pressure the Senate Ways and Means Committee to rubber-stamp the anti-poor tax package. “This is the neoliberal DOF, the President’s alter-ego on finance matters, opposing apparent Senate attempts to temper the brazenly anti-poor aspects of the Dutere administration’s proposed tax reforms”, said Africa.

Africa added that the Universal Access to Quality Tertiary Education Act of 2017 or Republic Act (RA) 10931 requires the government to fund implementation of the law, thus the DOF cannot make this contingent on the TRAIN or other revenue measures.

“RA 10931 has Sec. 15 Appropriations that obliges the government to include funds for free tuition, fees, other educational expenses and cost of living in the annual General Appropriations Act (GAA),” Africa noted.  “If the government does not push such an item in the GAA then this can be questioned in the courts as the government violating the law,” he said.

Africa said that the DOF’s statement is irrelevant to TRAIN because government is obliged to raise funds for quality tertiary education with or without tax reform.

“Moreover, government’s considerable coercive powers are better spent on raising revenues for national development from the huge idle socially unproductive wealth of the oligarchs and other super-rich families,” Africa concluded.