Bam says there is fiscal space for suspending TRAIN Act

There is enough fiscal space to finance the government’s free tuition program even without the Tax Reform for Acceleration and Inclusion (TRAIN) Act in place, Senator Paolo Benigno “Bam” Aquino IV said Wednesday.

In a television interview, Aquino refuted the argument of the Department of Finance (DOF) that the infrastructure development and social protection programs could be derailed if TRAIN is suspended.

“Hindi talaga totoo iyan. That’s really not true. It’s not true, because ang mare-raise lang naman ng TRAIN ay a hundred and thirty billion (P130 billion), and your budget is about P4 trillion. So kung tutuusin, for this year, ang mare-raise lang ng TRAIN napakaliit compared to the actual annual budget,” he said.

TRAIN was signed into law by President Rodrigo Duterte in December, reducing the personal income tax rate and expanding the value-added tax base.

Budget Secretary Benjamin Diokno has noted that tax revenue will largely finance the government’s massive infrastructure program.

Suspending TRAIN would slow down the Build, Build, Build program and possibly have a negative impact on the government’s ability to fund the free tuition program and the increase in salaries of the uniformed personnel, Finance Secretary Carlos Dominguez has said.

Aquino totally disagrees with Dominguez’s position on the matter.

“Your annual budget is the one na nagbibigay ng pondo sa mga proyektong iyan. But, at the end of the day, it goes back to the senators and congressmen to decide what are their priorities. So I’m sure among the senators... we will be able to find space,” Aquino noted.

“Kung kailangang i-suspend ‘yung excise taxes at pagaanin muna ‘yung sitwasyon ng ating mga kababayan, we will find a fiscal space to be able to fund this project,” he said.

Aquino has filed a bill restoring his earlier proposal to give the government the authority to stop the implementation of TRAIN once inflation breaches the government target.

The central bank said last week it expects inflation to settle at 4.6 percent this year, above the 2- to 4-percent target range of the government.

The Philippine Statistics Authority has reported inflation accelerated by 4.5 percent in April. —Jon Viktor Cabuenas/VDS, GMA News