THE chairman of the House committee on ways and means said it will “just improve” the Finance department’s proposal to lower personal income tax (PIT) and its offsetting measures, instead of overhauling it totally and coming up with its own version.
Quirino Rep. Dakila Qua, the panel chairman, said one of the improvements that the lower chamber will work on would be the inclusion of a provision on tax collection efficiency of revenue-generating agencies.
“I reviewed the DoF proposal together with Speaker Pantaleon Alvarez and we see the package as well-crafted. However, our comment, we should include collection efficiency measures,” Cua said.
“Our main thrust is to reflect efficiency measures to the bill because critics [of the measure] said it’s too focused on introducing new revenue measures without putting focus to tax administration efficiency measure,” he added.
But Cua said the House will retain value-added tax exemptions for senior citizens and persons with disabilities (PWDs).
“The speaker has made it clear, it is not possible to remove [VAT exemptions for senior citizens and PWDs] and of course we’ll stand by him,” the lawmaker added.
Cua also clarified that the lower chamber will not produce a new counterproposal bill to substitute the DoF tax reform package.
“It is more like proposed amendments to the [DoF] bill, its not really a counterproposal,” Cua said.
Alvarez earlier said the House would file a counterproposal to the DoF‘s tax reform package as he rejected the agency’s proposed offsetting measures to cover up for the estimated P159 billion in foregone revenues from the planned PIT rates.
Instead of removing the VAT exemptions for senior citizens, PWDs, and excise tax on petroleum, Alvarez said the DoF and its attached agencies should improve their tax collection efficiency.
“The House of Representatives will not be the rubber stamp of the administration. As I have said before, rest assured that we will always be on the side of the people. We won’t allow this [anti-poor] proposal to pass through the House of Representatives,” Alvarez said.
Alvarez had earlier frowned on certain provisions in the proposed tax reform measure submitted by the DoF such as reducing the coverage of the value-added tax exemptions granted for senior citizens and persons with disabilities, as well as an increase in excise taxes imposed on petroleum products.
The proposed DoF measure provides that workers earning not over P250,000 annually will be exempted from PIT.
The proposal also seeks to expand the VAT base by reducing the coverage of its exemptions, including privileges granted for senior citizens and persons with disabilities; adjustment of excise taxes imposed on petroleum products; and restructuring the excise tax on automobiles except for buses, trucks, cargo vans, jeeps, jeepney substitutes and special purpose vehicles to cover up the estimated P159 billion government revenue lost.
It also seeks to repeal Section 4 of the Expanded Senior Citizens Act of 2010 as well as the Sections 32-A and 33-A of the Magna Carta for Persons with Disabilities.
The Section 4 of the Expanded Senior Citizens Act of 2010 provides VAT exemption for medicines, professional fees of attending physicians in all private hospitals, land mass transit, airfare, seafare, and utilization of services in hotels, admission fees in theater and cinema houses, funeral and burial services for the death of senior citizens.
Sections 32-A and Section 32-B of the Magna Carta for Persons with Disabilities provides the 20 percent discount and exemption from VAT, if applicable, on the certain goods and services tax incentives to a family of a PWD, respectively.