By Danilo P. Padua, PhD
Riding a train is something that I have experienced locally and abroad. Some are good, some are not so good rides.
I can still remember my first train ride from San Fernando, La Union to Tutuban, Manila to start my high school days. The train coaches were old but they were full. On reaching Damortis, I saw a station which to me was impressive. And it was the best station north of Manila. That was then when those going to Baguio alighted to catch a connecting bus to the city. Buses from the defunct Benguet Auto Line were the ones waiting for passengers. Sadly, just a few years after that first ride, the train services from Manila to La Union ceased operations. It was a case of neglect. The rails and the coaches were not maintained. It was a losing proposition because of that.
Then I had the pleasure to ride a low-cost commuter train from Manila to Los Banos during my college years. Lo and behold, this train service did not last long, because of mismanagement.
Countless times, I have squeezed myself inside the LRT and MRT trains in Metro Manila. I felt very secure and proud to have taken those trains during their early operations. Today, again because of neglect, those train systems, particularly that of MRT, had become a source of nightmare to commuters.
When I was a visiting scientist at the International Crop Research Institute for Semi-Arid Tropics, in Hyderabad, India (thanks to Dr. William D. Dar, the former director general there), I needed to take trains to go to some cities. Their trains were almost always full of commuters. No problems of the coaches and the rails. When I took an inter-state train ride, however, I had an unexpected experience– the train had a mechanical trouble and got stuck for around three hours in a desolate place! And to think that my Indian friend was so cocky in telling me that their trains never got stuck in the middle of the tracks. Their trains were not also well-maintained, and the one I was on was old.
What is interesting with the Indian rail system was that, when I was there the rail system was being touted as a model on how a heavily losing government enterprise could be turned around. In fact, the manager of the system was being honored here and there for what he did. What happened to the train I was on, was actually an isolated case then.
It’s different in Europe, where the train is also a major component of their mass transport system. They are quite efficient. It is not uncommon to hear a train engineer in Germany saying, “I am sorry ladies and gentlemen, our train was late by about 15 seconds. Fifteen seconds, and they are saying sorry! That is efficiency. What about us here? It is very common also to see in Europe, especially in Belgium, which has the densest rail system in the whole world, that the rail lines are being repaired while continuously being used by trains every 15-30 minutes. That’s also efficiency. To attain such efficiency, the coaches should be always in excellent condition, and the rails are smooth as new and laid in firm foundations.
You might have guessed by now that this piece is not exactly about the trains as related above. It is about another TRAIN. It is more about the Tax Reform for Acceleration and Inclusion (TRAIN) Law or Republic Act No 10963 that took effect on January 1, 2018. It is also called the tax reform law. This TRAIN replaces the outdated National Internal Revenue Code (NIRC) which came into being 20 years ago. They said that this TRAIN “aims to correct the deficiencies of the past tax system, making it simpler, more efficient and fairer”. And that, “the TRAIN will benefit the poor more by promoting equity”.
After a quick look at the law, reading some explanations from tax experts and listening to government officials on TV, I am inclined to agree, without any qualms, that the TRAIN Law does correct some deficiencies in the previous tax system.
For example, if one is receiving a salary of PhP20,000 or less in a month, he/she is exempt from paying income tax, if receiving 25K-95K the decrease in taxes (against the NIRC system) will range from 39,403.80 to 82,991.56 per year. A monthly income of 100K to 160K will have a yearly tax decrease by about 85,491.48 to 101,091.43. Even a salary of PhP250K will also be entitled to a tax decrease of about 101,559.96 . So, TRAIN is fairly equitable in its taxation scheme.
They say that those to be benefited by the law includes the low income earners, the small, micro-enterprises and some 10 million poor Filipino families.
To say, however, that it will benefit the poor more is not entirely correct, in my view. The train law imposes excise tax , among others, on LPG, diesel, gasoline, other fuel products. All of the above are being used in industry, manufacturing, transportation, etc. Which means that any increase in their prices will immediately cause spikes in prices of many commodities, especially the essential ones.
This early, which is about just two weeks into the implementation of the law, fuel prices have already increased in many parts of the country. Meat vendors are expecting an increase in meat prices by about PhP5-20/kg. The transport industry is poised to ask a huge increase in fares within this first quarter of the year.We can go on and on enumerating here about inevitable price increases, and ultimately it will lead us to a conclusion that the benefit that we can get from the tax reform law could be erased completely.
The agriculture sector is said to be a very huge fuel consumer, thus, the increase in food prices is inevitable. Add to that the cost of transporting goods, and one might be staring at a large spike in food prices. So what will be left? The increasing purchasing power of the people as envisioned from the TRAIN Law might just be a dream. The rail in which the train moves seems to be rough.
The tax reform law also imposes new taxes on drinks using sugar and caloric/non-caloric sweeteners. And who are the main consumers of these? It’s the common people. It seems that the intended sector of the society that is to be protected are exactly the same ones that are squeezed dry to provide some financial requirements of the country.
There are so much positives in the tax reform law but unless some measures to prevent the unbridled increase in consumer prices are put in place, the TRAIN could be derailed in our face.
I hope this TRAIN will not go the way of our railway system as described early in this piece but it could be like the Indian railway or the very efficient European railway system. **
