IT’S time to free the Filipino people from the highest income taxes in Asia by increasing tax exemptions and tax brackets and do away with cumbersome reportorial requirements that are cumbersome both to taxpayers and the bureaucracy.
“Since 1997, the ordinary Filipino has been paying for the highest tax rates in Asia. It’s time to set them free,” said Deputy Speaker and Marikina Rep. Miro Quimbo.
Quimbo proposed that those earning an annual gross income of P300,000 and below be spared income taxes while the uber-rich earning P10 million and above will be imposed a higher tax rate.
“Since the government is eyeing a radical overhaul of the income tax structure at this juncture, it will better achieve its aspiration for social justice by giving the low to middle income earners a higher income tax exemption,” Quimbo said.
The latest available data showed that there are 9,495,547 tax filers with annual income of P300,000 and below. “With this proposal, almost 10 million taxpayers will finally be liberated from decades of suffering,” he said.
“Having an annual income of P300,000 or below for a family of five is barely enough to make ends meet with food expenses, rent, and education for three children. This does not factor in emergencies, which destabilizes their finances,” Quimbo argued.
“Thus, exempting these low to middle income earners from paying any income tax would give them some needed breathing room. They may not qualify as ‘poor’ if we apply the official poverty definitions, but these are people who are just making ends meet and are highly vulnerable to economic shocks or crises,” he added.
He said once enacted, his proposal for a tax exemption would help these 9.5 million low to middle income earners achieve a simple and decent life. “That is a Tax Cut for Every Juan who truly deserves it,” Quimbo said.
In the current system of individual income taxation, only those who are earning the statutory minimum wage are exempted by virtue of Republic Act 9504.
Quimbo said the proposed gross income taxation would also unburden the taxpayers with the voluminous documentary requirements of personal exemptions and allowable deductions. In proposing gross income taxation, the process will be simplified for the taxpayers, he added.
Quimbo’s proposal is embodied in House Bill 20, saying “it is the first step in his Tax Reform Proposal, which is calibrated but comprehensive, partitioned but correlated, and phased but realistically doable.”
House Bill 20 also serves as the centerpiece bill in income tax reform deliberations in the House of Representatives, he said.
“I envisioned tax reform in phases so as not to severely affect the country’s fiscal health, and not to protract the much-needed inflation-adjustment of individual income tax. That is akin to an emergency solution even while discussions on sweeping restructuring are ongoing,” Quimbo said.
“I am bringing into the discourse the most significant aspect of my proposal: a restructuring that would unburden the low to middle income classes earning P300,000 and below, and slap a higher tax to the uber-rich earning P10 Million and above. That will surely bring about genuine change to our taxpayers.”, Quimbo said.
Quimbo is also the principal author of HB 2379 which seeks to lower corporate income tax from 30 percent to 25 percent, and HB 3010 which grants tax amnesty for all unpaid estate taxes.