House kills proposals to lower taxes
SPEAKER Feliciano Belmonte Jr. said Thursday that pending proposals to lower individual and corporate income tax rates will no longer be passed for lack of time.
While acknowledging the government needs to adjust the tax rates to increase the take-home pay of low- and middle-income wage earners, Belmonte said the measure might only be subjected to open debates and discussions, but will have to be considered by the next administration.
Belmonte also said the House has nothing but the proposed 2016 national budget on its agenda during the last session days until Oct. 9.
“I am in favor to the proposal lowering income tax but in rational way, not in a way that we are all being rushed because this is popular with the voters,” Belmonte told reporters.
“I don’t think [we can pass it] as we only have few days left before the recess [to give time for the filing of the certificates of candidacy on Oct. 12]. Also I don’t think even you would want an election-driven reform. The measure needs to be passed here [in the House], in the Senate, in the bicameral conference committee, and [signed by] President Aquino to become a law,” Belmonte added.
Belmonte said the challenge for the next administration was to find ways to increase the take-home pay of workers.
“Personally I would have wanted discussion on it, more in depth study. Let’s get momentum in its favor, and then make it one of the first priorities of the next administration. Let them reap the reward of this,” Belmonte said.
Taking a cue from the Finance Department, the Palace rejected a bill calling for the lowering of income tax rates, warning of a revenue loss of P30 billion.
Finance Secretary Cesar Purisima said the government “cannot put fiscal sustainability and credit rating at risk by doing piecemeal revenue-reducing legislation.”
The opposition United Nationalist Alliance or UNA on Thursday criticized Liberal Party standard bearer Manuel Roxas II for opposing the proposed tax cuts, saying he was showing his true colors.
“Vice President Jejomar Binay was not surprised by the LP presidential bet’s move in opposing the tax measure since Roxas is a member of the oligarchy, who is out of touch with the sufferings of the common man,” UNA spokesperson Mon Ilagan said.
“He has no sympathy to what was happening outside his iron gates in Cubao,” Ilagan added.
President Benigno Aquino III, who anointed Roxas as the Liberal Party candidate for president in 2016, earlier turned down a call from major business and labor groups to lower the tax rates.
“Eighteen groups, including business, trade, professional and labor groups, have pressed for tax reform. Unfortunately, Mar Roxas is out of touch,” Ilagan said.
“The equivalent of three months’ salary, each and every year, of an ordinary worker goes to taxes in exchange for lame government service,” he added.
The Trade Union Congress of the Philippines said more than 40 million wage earners were disappointed by President Aquino’s rejection of tax cuts.
Lowering tax rates would increase the purchasing power of workers, said TUCP-Nagkaisa spokesman Alan Tanjusay.
Ilagan, on the other hand, said most Filipinos are wondering how they can feel relief from the administration’s Tuwid na Daan (straight path) mantra when they are saddled with one of the highest tax rates in Asia.
Ilagan said the outdated tax brackets should be adjusted to account for prevailing rates of inflation.
“Our tax system has to be seen as fair-meaning. Those with fat pay checks should pay higher taxes than those whose pay checks are less—and inflation-adjusted tax brackets, are simply right and just,” he said.
He added that the estimated foregone income from the reformed tax system is only 1 percent of the 2016 budget, or about P30 billion out of the total P3.002 trillion.
“This can easily be made up for by other revenue means, like stricter fiscal controls in an election year or more robust revenue collection efforts,” he said.
Senator Francis Escudero also took a swipe at Roxas, who said a cut in tax rates would lead to cuts in government projects, saying no Filipino should be deprived of services.
“In Club Filipino, I said we needed a government with a heart, one that would find ways to lower the prices of electricity, and goods, as well as lower the taxes we pay,” said Escudero.
“If he truly cares about the three million to four million middle-income workers who stand to benefit from lowering income taxes, and empathizes with the struggles they face every day, then he should find a way to make it work,” Escudero said of Roxas.
Escudero, who had earlier urged Malacañang to certify as urgent measures to lower the income tax, added that the Palace’s own allies in the Senate and the House of Representatives have carefully studied the bills now being discussed, and have proposed various means by which government can compensate for the estimated P30 billion in revenues the government expects to lose from lower taxes.
“We don’t have to raise the VAT as earlier measures like the Sin Tax have already increased government revenue. Lowering the income tax broadens the tax base, increases the purchasing power of our people and it increases consumption, thereby spurring production and producing more jobs. We need to lower income taxes and we need to do it now,” he said.
Workers protested before the offices of the Social Security System and the Bureau of Internal Revenue in Quezon City to reiterate their demand for tax exemptions.
“We can no longer bear tax deductions that do not really translate to responsive social services. We want tax exemptions now,” said Bukluran ng Manggagawang Pilipino chairperson Leody De Guzman in a statement.
“It is the ordinary wage earners who are forced to bear the tax burden through automatic deductions unlike foreign corporations and their local partners who enjoy multiple tax privileges. Our purchasing power, weak as is, further eroded by the rising cost of commodities,” said De Guzman. With Sandy Araneta and Macon Ramos-Araneta