Some major supermarkets were found to have jacked up prices beyond the required levels of some items covered by the first package of tax reform law, an official of the Department of Finance (DOF) said, citing reports from the Department of Trade and Industry (DTI).
Finance Undersecretary Karl Chua said DOF is in constant coordination with other agencies, and DTI has submitted a report that eight major groceries in Metro Manila “were issued inquiry letters for prices higher than SRP (suggested retail price).”
“Of the eight, three already agreed that their prices were too high so they adjusted and the five are still going to respond,” he said, but declined to identify the supermarkets.
Chua said it would be hard for the government to monitor all business establishments so they initially focused on major stores, particularly in Metro Manila.
He said there were no major price movements in the provinces, citing that inflation uptick in Areas Outside the National Capital Region (NCR) is about 3.5 percent compared to the 5.4 percent in NCR.
The first package of the Tax Reform for Acceleration and Inclusion (TRAIN) law took effect January 1, 2018.
It cut workers’ income tax rate, giving them a free rate for their first PHP250,000 annual income, while the tax rate on the excess income depends on how much is in excess of the tax-free amount.
To counter the impact of the personal income tax cut on government revenues, excise taxes on fuel and sugar-sweetened beverages, among others, were hiked.
Regulators have reminded businessmen not to take advantage of the tax reform law, noting that their existing inventories were bought using the old tax rates.
While old stocks of sugar-sweetened beverages and oil products are not expected to go up until around this month, it does not cover sin products which was the main driver of inflation rate last January, Chua said.
Data from the Philippine Statistics Authority (PSA) showed that food and non-alcoholic beverages rose by 5.2 percent last January but the alcoholic beverages and tobacco index posted a double-digit rate of 12.2 percent. (PNA)