THE minority bloc in the House of Representatives on Wednesday welcomed the House committee on ways and means’ postponement to approve the Palace-proposed Comprehensive Tax Reform Package which some said would resulted in billions of peso revenue losses once implemented.
House Minority Leader and Quezon Rep. Danilo Suarez, at the same time, stressed the need for government agencies to improve their absorptive capacity before pushing for a comprehensive tax reform.
“We need not rush most especially if we are not yet capable of spending the appropriated budget efficiently. We suggest a ‘revenue neutral’ period for two years. During this period, the government should only spend what it earns,” Suarez told a news conference.
Suarez said that while the minority bloc supported the intent of the bill such as to reduce personal and corporate income taxes, he said the group was “hesitant with respect to its practical aspects and implementation.”
The committee, chaired by Quirino Rep. Dakila Cua, on Tuesday deferred the approval of House Bill 4774 to allow a technical working group to harmonize provisions of the bill, upon Suarez’s motion.
Suarez said the CTRP proposed the reduction of personal and corporate income tax rates, which would result in P173.8 billion worth of revenue losses annually for the government.
“With this proposed tax system, those who earn P250,000 and below would be exempted from personal income tax, while corporate tax would be reduced from 30 percent to 25 percent,” Suarez said.
To offset the losses, Suarez said excise taxes such as those imposed on automobiles, petroleum products, and luxury goods would be increased.
A projected P162.5 billion net revenue gain is expected on the first year of implementation, he added.
“For the past six years, the government failed to spend about P1 trillion of the appropriated budget due to poor absorptive capacity of government agencies,” Suarez said.
