Martial law extension or expansion will be a very expensive, unproductive experiment

Photo from Inquirer

The battle of Marawi has already entered its 9th week.  And it won’t be over until everything gets back to normal.  In fact, it is the normalization and rehabilitation part of this conflict which is a bigger war to win since failure in this aspect, we believe, will only create more conflict in this highly stratified region of the country.

 

We anticipate, though, that Marawi will ultimately fall back into the hands of our government forces.  War ultimately ends even without a victor. What it leaves, definitely, are the enormous humanitarian costs that will be very difficult to measure.  The Marawi war has already claimed at least 500 lives and created more than 200,000 bakwits.  Thousands of livelihoods were also lost as the city was razed into the ground by aerial bombings and fierce ground battles. Furthermore, the declaration of martial law has endangered civilians’ free exercise of human rights in the entire island of Mindanao.

 

The Supreme Court has already ruled on the legality of the declaration of Martial Law in Mindanao but the 60-day duration of Proclamation 216 is set to expire on July 22, 2017.  Hence, the President, Congress and the entire nation now face a bothering question on whether the Martial Law in Mindanao should be extended or be expanded to cover the entire Philippines.  The House leadership, when asked, is even willing to extend and expand Martial Law for the entire term of the President or until 2022.

 

NAGKAISA labor coalition declares its opposition to the extension or expansion of Martial Law based on the following grounds: 

 

1.     It is not necessary;

2.     It will be very expensive; 

3.     It is unproductive and is a disincentive to economic progress;

4.     It weakens our democratic institutions; and

5.     It strengthens the hands of the totalitarians.

 

We find no compelling reason to warrant its extension or expansion at this point in time.  We believe that lawlessness in many forms can be addressed by a highly professional and effective military/police leadership. Ensuring professionalism and quality armed services is where Presidential powers are best exercised. 

 

Furthermore, extending this kind of war for a much longer time and carried out on a nationwide scale will become a very expensive experiment for a country whose development is highly dependent on loans and regressive taxes. It is therefore unacceptable to see the proposed expansion of VAT and imposition of excise taxes on oil, automobiles and sugar drinks funding not a social program but infrastructure for war.

 

Lastly, it will be very unproductive for the President to spend his remaining years in office for this costly war.  War is both destruction and political distraction.  It neither creates nor equally redistributes social wealth that is now concentrated in the hands of oligarchs.

 

The President, in other words, has a better war to wage and win against contractualization, low wages, and high prices of basic goods and services.  If you want peace, Mr. President, build social justice and economic inclusion first.

 

Dito ka namin gustong maramdaman

Nagkaisa Labor Coalition

19 July 2017

Labor coalition welcomes lower tax on personal income but rejects regressive impact of excise taxes

Workers have long been demanding for higher tax exemptions, hence, the approval by the House of Representatives of Package 1 of the Tax Reform for Acceleration and Inclusion (TRAIN) is a welcome relief.

Under the TRAIN, income lower than P250,000 per year will be tax free while higher income brackets, except for those who earn more than P5 million, will be charged a lowered tax rate of 25% from the current high of 32%.

This is surely a welcome development.  But for the labor coalition Nagkaisa, the workers’ gain in Personal Income Tax (PIT) will be offset in a regressive manner by the imposition of excise taxes on fuel products and the lifting of VAT exemptions in the sale of specific goods and services.

“Everyone knows, not just workers, that it will increase prices of goods and services that would affect mostly the poor and those at the lower income brackets,” said Nagkaisa spokesman Renato Magtubo. 

Magtubo said the TRAIN’s objective of shifting the tax burden from the poor to the rich, “Seems to be scheming if not tricky as forgone revenue on the side of the government, which is equivalent to individual savings derived from lower PIT of specific income group, shall be recovered in a universal manner through excise taxes and expanded VAT.”

The group explained further that the tax base can never be expanded through exemptions in PIT and corporate income, making indirect taxation through excise taxes and VAT expansion the main strategy in generating new and more revenue.  “Otherwise, nobody is going to pay for the lost revenue,” added Magtubo.

Under TRAIN’s package 1, a P3.00-P6.00 excise taxes will be imposed per liter on fuel and P10 for locally produced sugary products while several VAT-exempt products and services will be lifted, including cooperative income exceeding the P3 million thresholds.  Likewise, sale of real estate for socialized housing will now be covered by VAT.

According to the group, even the simulations made by staffs of the finance department showed the inevitable impact of increase in VAT payments by decile group – 43% for the richest 10% and 35% for the bottom 80%.  Increase for the second richest 10% is 22%. 

“An increase of 43 and 22 per cent respectively may mean nothing for the richest 20% who got significant savings from PIT exemptions.  But a 35% increase is surely a burden for the bottom 80% who includes the majority in the formal and informal sector, employed and unemployed, of the working class.  In the same manner everyone will be paying for the direct and indirect impact of excise taxes on fuel,” explained Magtubo. 

The labor leader added that those living in SPUG areas which rely on diesel as their single source of power will be absorbing a “minimal” impact, according to DOF.  But that would mean additional P84 for those who consume 100 kWh per month and P106 for those who consume 300 kWh. 

“These are the immediate impact that will hit everyone while the poor wait for the promised transfers contained in the proposed expenditure programs of the government,” said Magtubo.

The group said it will intervene in the continuing deliberation of the tax package in Congress especially on the proposed lowering of income taxes for corporations from 30% to 25%. 

“Our main question for this is why a tax rate on corporate income, which is supposed to be a tax on profit, is being lowered down to the same level of personal income which is a tax on labor?  A uniform rate on business and personal income can never be considered progressive taxation,” concludes Magtubo.”

NAGKAISA

On Tax Reform for Acceleration and Inclusion (TRAIN) Package 1

13 June 2017

PM to BOC: Balikbayan boxes contain labor and love; smuggled goods are in container vans

NEWS RELEASE

24 August 2015

Labor group Partido Manggagawa (PM) joined OFW groups and individuals around the world in denouncing the new policy of Bureau of Customs (BoC) to subject balikbayan boxes to inspection and to impose duties on their assessed values exceeding $500.

“The policy is anti-OFWs on two grounds. First, it begins with the sweeping assumption that OFWs are into technical smuggling. Second, it ends up with a new revenue scheme that can generate some P600 million/year from small articles being sent home by our OFWs,” said PM Chair Renato Magtubo.

Partido Manggagawa is asking the BoC and Malacanang to scrap the twin policy altogether as they smack with a veiled intention of making money out of the small and non-business articles coming from our OFWs.

The BoC came up with the memorandum explaining the new policy based on the findings that balikbayan boxes are being used for technical smuggling. The bureau said some P50 million are lost every month from technical smuggling and one way to address this problem is to subject balikbayan boxes to inspection.

But Magtubo said, “Stricter rules must be imposed against illicit trade, including imported goods that are meant for business and not against compressed articles that contain hard labor and deep love coming from our OFWs.”

He pointed out that this reform is also aimed at the wrong target since smuggled business articles are usually found in 40 ft.-long container vans and not in 4-cubic foot balikbayan boxes.

On the planned imposition of duties against articles exceeding $500 in value, Magtubo said the policy can be used arbitrarily and indiscriminately against OFWs who are unaware of custom’s valuation as well as the procedures on how values are determined on a mix of articles that are compressed inside the balikbayan boxes.

The labor group lamented the fact that OFWs have already been paying $0.05 cents per dollar in their remittances thus the new policy will be an added burden to them.

He also agreed with the view that the new policy may only create new forms of corruption in the most corrupt agency at the expense of hardworking OFWs.