VICE President Jejomar Binay expressed frustration Thursday over Congress’ decision to stop hearing a measure to lower income tax rates—among the highest in Southeast Asia.
Binay described the administration’s “straight path” as inept and insensitive to the plight of millions of Filipino workers.
Instead of addressing inequality, this administration tries to confuse people and hides from them that lowering income taxes would be beneficial not only to taxpayers but the government too, Binay said.
“Lower income tax rates mean workers have more cash to take home, giving them greater purchasing power. This, in turn, is good for businesses,” he said, adding that this would be a priority if he were elected to office.
Unlike the candidates from rich families who do not see the urgency in lowering income tax rates, he will certify the bills adjusting the current tax rates to inflation as priority legislation, Binay said.
He said that under the present tax system, there will come a time that the tax rate of teachers, policemen, soldiers and nurses will be as high as the tax rate of millionaires in the county.
The Vice President added that tax rates have become unreasonable because they have not been indexed to inflation. He also said those with higher wages should pay higher taxes than those earning less.
“The peso, when the tax code was passed 19 years ago, is only worth 43 centavos today,” he said.
Liberal Party standard bearer Manuel Roxas II said on Wednesday night that he is open to calls for the reform of country’s taxation system on both personal and corporate income tax, but said these must be studied carefully so as not to hurt the spending power of the government.
“[Taxes] support the infrastructure projects that we want to happen. But, how are we going to fund education and other services that need to happen? I think that the responsible debate in taxes heeds the responsibility that we need to cut this, accordingly we should cut these. It’s a zero sum game,” Roxas told a group of Ivy League school alumni.
“What comes in as taxes goes out to pay for services and infrastructure. It’s zero sum. It’s not a fairy tale that we will not pay taxes, we will cut taxes and infrastructure and health care and education and others will still continue,” he said.
Roxas echoed Aquino’s vow that there would be no tax cuts during his term.
He said that despite having the highest taxes in the region, the Philippines was the lowest in terms of the tax effort, now at 15 percent of gross domestic product, compared to 18 to 19 percent in neighboring countries.
“I think corporate tax reform should be on the table and should be discussed. However, you should not look at it in one number. We should also look at our tax efforts,” Roxas said.
The administration standard bearer reiterated that he supports the call for tax reform, but unlike other presidential candidate, he is not doing so in the heat of an election campaign.
“I don’t think that these needs will be discussed during election period. Otherwise, it will be politicized,” Roxas added.
