19 August 2017


AER calls on cause-oriented groups to support tax reforms to fund healthcare, education


Action for Economic Reforms (AER) challenges critics of the tax reform, like Bayan Muna and Freedom from Debt Coalition, to answer how they want to finance the huge requirements for health and education services that they are asking for.


“These critics oppose the proposed excise tax on fuel, tobacco and sugar, but they fall short in providing concrete solutions. They demand efficiency of collection before taxes, yet they resist the reforms that will improve tax administration like the broadening of the value-added tax (VAT) base and the adjustment of fuel taxes to inflation,” said Jo-Ann Diosana, AER’s senior economist.


AER lamented that those opposing the tax reform want money for free education, universal health care, and modernization of public mass transportation, but they do not want new taxes.


“The critics are correct in calling for taxing the rich, but they are not aware that the revenue from taxing the rich, which in fact is included in the tax reform, will still be insufficient to fund the attainment of Ambisyon 2040. All citizens have a responsibility to pay taxes, with those having the ability to pay having to pay more,” Diosana added.
In a statement released to the media today, AER said funding healthcare, education and social protection is most urgent. At the same time, the generous reduction in personal income tax rates which will rightly provide relief to the working class and other income earners will, however, reduce government revenues by P141.4 billion. “In other words, there is no escaping tax reform to fund the development requirements, to recover the loss of revenue from the personal income tax relief and to correct the weaknesses of the tax structure,” AER added.
The fiscal policy reform advocacy group is thus calling on other civil society organizations (CSOs) to change their old approach and take the opportunity to secure tax reform that will fund programs, especially on education, universal health care, social protection, and pro-poor infrastructure projects.

“Statements and actions critical of the tax reform bring publicity but on their own, without concrete, feasible proposals, they’re unlikely to bring about the progressive change in the tax system,” Diosana said.

AER takes note that there is an increasing number of NGOs or civil society organizations that support the tax reform.


Among these is Health Care Without Harm Asia which asked the Senate Committee on Ways and Means to consider fuel excise tax increase as a way of helping address the significant contribution of fuel in the rising greenhouse gas emission caused by fossil fuel. In a position paper submitted to the Senate, the group said the higher fuel tax will help address air pollution by discouraging excessive and inefficient consumption of gasoline and diesel. The group also mentioned the fuel tax increase as an important step to transition the economy to more sustainable, renewable sources of energy. (END)