The Philippine Chamber of Commerce and Industry, the largest business organization in the country, supported the tax reform measures aimed at lowering personal income taxes and broadening the tax base.
PCCI president George Barcelon said the tax reform package pending in Congress as a whole would have a positive impact on the economy.
Lowering personal income tax, he said, would increase the disposable income, spurring savings and consumption, which in turn leads to higher production. A welcome cycle could ensue, he said, where higher consumption and production would lead to a rise in tax collection.
Barcelon said it was high time the country reduces the personal, as well as corporate, income taxes to make them comparable with those enjoyed by citizens of neighboring Southeast Asian countries. The Philippines has the highest tax rates in Southeast Asia.
He said inflation had pushed many low-income earners into progressively higher tax brackets. He said the personal income tax brackets should be adjusted for inflation at once to promote fairness, social justice and competition.
The PCCI also welcomed offsetting measures aimed to increase the levy on consumption.
Barcelon said the country’s competitiveness would be furthered bolstered if spending in public health, education, social protection and infrastructure were at par with those of Asian neighbors.
He said government needed higher revenues to finance the planned higher spending on infrastructure and social services.
The PCCI said the current tax regime was a burden, especially to small and medium enterprises. It said tax forms had become too complex, making compliance extremely difficult for small businessmen without the help of accountants.