House on income tax cut: We’re not giving up

Categories: AnnouncementsPolicy News and Updates

Tags: , ,

Date Posted: 01 Nov 2015

 

House

They’re not picking a fight with President Aquino, but leaders of the House of Representatives are not giving up and will proceed with the process of approving a bill reducing individual income tax.

“There’s still time and leeway to make a final determination, particularly on the part of Malacañang and the DOF (Department of Finance). That’s why I’m not giving up on it, and it’s easy to galvanize public and congressional support for it,” said Marikina City Rep. Romero Quimbo, chairman of the House committee on ways and means.

Quimbo said there’s no conflict between the House position and that of the President, as both embrace the principle of responsible tax reform “and Congress is not irresponsible.”

Aquino, echoing the stand of finance and revenue officials, opposes the proposal, unless other measures are passed to offset the billions in revenue losses.

“We’re not even touching the tax rates itself but simply adjusting it to inflation because they’ve remained unchanged since 1997 and consumer prices have been rising since then,” Quimbo said.

He said the measure, which is close to being reported out of the committee, was not “unfounded nor a piecemeal tax legislation” but part of an entire package of tax reforms aimed at boosting growth and plugging revenue leaks.

Quimbo said the Senate and the House have ratified the Tax Incentive Management and Transparency Act, which is expected to generate at least P20 billion according to the DOF itself, or two-thirds of the expected P30 billion revenue loss arising from the lower income tax.

He said conservative estimates from government economists showed that the lowering of individual taxes based on the bill will immediately generate P4 billion from value-added tax owing to increased spending of consumers.

He said the chamber has other revenue-enhancing measures in the pipeline that will more than offset the supposed revenue losses.

Valenzuela City Rep. Sherwin Gatchalian said it was sad that there is a stalemate on the bill.

“Congress can definitely move on and should fight for our fixed-income earners. We’re supposed to be independent and a co-equal branch, lowering of income taxes should not be a casualty of politics,” he said.

He said it is hard to reconcile the fact that while Malacañang was fretting over the P30 billion in projected revenue losses, the Aquino administration was estimated to have underspent about P400 billion for this year alone.

He said it has been widely recognized and admitted by Malacañang that the government has been underspending since 2010, which largely contributed to the slowdown in growth.

He said next year’s proposed national budget is at P3.002 trillion and he was sure the government would not be able to spend all of it.

Gatchalian said Malacañang should not also raise the specter of a possible credit rating downgrade as rating agencies are more concerned with collection efficiency.

Senators Grace Poe and Francis Escudero support the proposal to adjust the tax brackets for personal income taxes once they are elected as president and vice-president, respectively.

“I also firmly believe that we should reform our tax code and from the onset we have already supported the reduction of our tax payments,” Poe said as she outlined her top priorities under her administration in case she emerges victorious after the 2016 elections.

Poe took this stand even as President Aquino and his economic managers have rejected the proposal to cut income taxes.

“I think that we should reclassify the different brackets for taxes,” she said, noting that the Philippines is one of the highest in Asia in terms of taxes imposed on fixed income workers.

Poe echoed the concerns of proponents, led by Sen. Juan Edgardo Angara at the Senate, that the people’s purchasing power will increase once their take-home pay increases.

This will also prop up the economy since the people will be spending more for goods and services.

Poe also noted that government underspending has been pegged at P600 billion since 2011 until present. The amount is too low compared to the P30 billion projected loses by Aquino’s finance managers if the tax reform measures are implemented.

Escudero expressed belief that the President will still have adequate time to approve the tax measures now pending at the House of Representatives and the Senate.

Quimbo leads the discussions of the measure at the House while Angara has been working hard for its passage at the Senate.

Escudero also questioned the stand of Liberal Party presidential bet Manuel Roxas II rejecting the tax cuts. He asked why Roxas does not want to help boost the purchasing power of middle-class Filipinos who have been bearing the brunt of high taxes and yet getting less from government in terms of services.

 

Source: PhilStar

Leave a Reply

Your email address will not be published. Required fields are marked *

*