A party-list lawmaker on Saturday slammed the passage of the administration’s tax reform package at the House of Representatives, saying the proposal—once enacted—does not bode well for poor Filipino families and the middle class despite the income tax reduction under the measure.
Gabriela party-list Rep. Arlene Brosas said the savings from the lowering of income tax under House Bill No. 4774 “will just be gobbled up by hikes in the prices of oil and other commodities due to higher excise tax and the expanded coverage of Value Added Tax.”
“The lowering of income tax serves as the icing on top of a very bad, stale cake. Underneath, we see an avalanche of price hikes arising from higher excise tax on oil and the expansion of VAT coverage that will surely hit both the poor and the middle class,” Brosas said.
“Rents, gas prices, jeepney and bus fares, money remittance fees, airfare, electricity bills, among others will increase under the proposed tax reform. In particular, poor women will bear the brunt of increased budget pressures due to costlier utilities and consumer goods,” she added.
Last week, the House committee on ways and means approved the proposed Comprehensive Tax Reform Package that seeks to lower personal income taxes but increase taxes on petroleum and other products to offset revenue losses of the government.
The bill provides that these tax rates shall also be increased by four percent every year thereafter effective Jan. 1, 2020 through revenue regulations issued by the Finance secretary.
Brosas said the supposed savings of the middle class from lower income taxes will be offset by higher excise taxes on oil and automobiles, not to mention the longer list of VAT-able goods and services.
“Income tax reduction and restructuring should be pursued independently rather than lumped with the baggage of new and higher taxes, as expressed in the deceptive packaging of HB 4774,” Brosas said.
