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Friday, March 29, 2024

Tax reduction won’t cause revenue losses

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VICE President Jejomar Binay on Wednesday allayed fears that reducing the income taxes would result in revenue loss for the government, saying there were many options to raise funds including selling of government assets, privatizing government-owned and –controlled corporations and improving tax administration and collection.

Binay also said there would be no increase in the value-added tax when the income tax reform bill was passed into law during his administration in case he won the presidency.

“We will ensure that the VAT will remain as it is so our people could buy more from their income,” Binay said.

“The point of reducing the income tax would be meaningless if the prices of our commodities would sky-rocket due to increased VAT.

“Raising the VAT is not the only way to compensate the revenue loss. We already have a menu of options to compensate for the potential revenue losses from reducing the tax rates.”

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Should he be elected president, Binay said, he would convene the Legislative-Executive Development Advisory Council within the 100 days of his administration for the swift passage of the tax reform bill.

“If given the opportunity to serve our fellow Filipinos, I will certify the tax reform bill as urgent after a thorough consultation with the Ledac,” he said.

“We are pushing for a comprehensive tax system reform that will gradually reduce the personal and corporate income tax rates in the Philippines to a level that is more consistent with our Asean peers.”

Binay stressed the advantages of passing a tax reform bill, saying it would result in improved tax collection and compliance.

“With the current taxation system, up to 85 percent of the total collection of individual income taxes is paid by the working class while only 15 percent comes from self-employed individuals and professionals,” he said.

“Tax reform would result in the improved competitiveness of Philippine corporations and their workforce. It will also encourage more foreign investments, resulting in more jobs for our people and more revenues for the government.”

Binay said tax reform would also lead to increased consumer spending, allowing the government to recover some of the short-term revenue loss.

He said he was disappointed that some government officials and candidates were dismissing the tax reform bill as a “pogi bill,” designed only to attract votes from the middle class.

“It is unfortunate that this issue is being politicized. The tax reform measure will benefit individual households, society and the economy at large,” he said.

“Our tax system must be seen as fair. Those with bigger paychecks ought to pay higher taxes than those who earn less, and inflation-adjusted tax bracket is only just.”

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