Tax cuts will show empathy, solon says

DESPITE his rejection of the idea, lawmakers continued to urge President Benigno Aquino III to show concern for the hardships of Filipinos by certifying as urgent bicameral proposals to cut personal income tax rates to 15 percent from the current 30 percent.

“That would show his concern and compassion for the workers,” said Leyte Rep. Ferdinand Martin Romualdez, author of an approved House bill exempting persons with disabilities from paying the value-added tax on certain goods and services.

Romualdez, a lawyer and president of the Philippine Constitution Association, reiterated his opposition to the proposal of the Department of Finance to increase the value-added tax from the current 12 to 14 percent.

“We should not increase the VAT because this will jeopardize our concern for our workers,” Romualdez said.

The congressman made the remarks as Senator Sonny Angara, who sponsored the VAT exemption bill in the Senate, said Aquino may have been “misinformed” by his economic managers into rejecting proposals to reduce income taxes that would benefit five million Filipinos.

“Many will be affected once EVAT is increased. That [idea] could have only come from [Finance] Sec. [Cesar] Purisima and [Bureau of Internal Revenue]Commissioner Kim Henares,” Angara said

“I don’t want to use the word brainwash. Maybe a slightly less strong word could explain how the President [came to that position],” Angara said.

While the Department of Finance has been asking for a 220-percent increase in their budget for next year, Angara said he cannot understand why they are rejecting recommendations to lower income taxes being imposed on taxpayers.

Angara, chairman of the Senate ways and means committee, said he offered a compromise to an across-the-board tax rate cut by indexing tax rates to inflation.

“If inflation has depreciated the 1997 peso to P2.25 today, this means that P100,000 in 1997 is now P225,000. So if what is being taxed in 1997 was P100,000, what should be taxed now is P225,000 because if not, the taxpayer will be the loser here,” Angara explained.


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