Despite the apparent aversion of Malacañang to tax measures that could slash government revenues, a lawmaker filed a proposal that would allow employees earning as much as P20,500 monthly to pay only a 5-percent income tax.
House Bill (HB) 6120, filed by Rep. Paolo S. Javier of the Lone District of Antique, raises the ceiling for the income that would be slapped a 5-percent tax to P20,500 from the current P10,000.
“The country’s individual income taxpayers have lamentably suffered inequity on account of the tax system’s inability to keep up with rising inflation rates for quite sometime. Considering this unfair situation, it is just timely that individual income taxation be fixed to make it once more equitable,” said Javier, who is also assistant majority leader.
Since the effectivity of the National Internal Revenue Code (NIRC) of 1997 on January 1, 1998, Javier said the individual income-tax rates have remained based on the 1998 Consumer Price Index.
“This means that a working man’s monthly pay of P10,000 back in 1998 is now equivalent to P20,500, which should just be entirely taxed at the rate of 5 percent instead of a higher rate,” he said.
Javier said the tax on a salary of P20,500 should be P1,025 and not P1,550, leaving a worker with an additional monthly take-home pay of P525 or P6,300 more disposable income on a yearly basis.
HB 6120 also provides that not later three years after the effectivity of the proposed measure, and every three years thereafter, each net taxable income level and normal tax rate herein stated shall be adjusted to its present value using the Consumer Price Index published by the Philippine Statistics Authority.
Meanwhile, Party-list Rep. Neri Colmenares of Bayan Muna said proposed tax reforms could most likely be passed in Congress in the next few months, as lawmakers bolt from the ruling Liberal Party in the run-up to the presidential elections next year.
Colmenares said the sway of Malacañang over the votes of the Liberal Party congressmen and senators is waning, as party members look for which candidate to support for president in the next elections.
“I think there is still a chance because the President does not have that kind of influence anymore among his party mates and there is clamor from the people to pass these reforms,” Colmenares said in his recent speech at the general membership meeting of the Tax Management Association of the Philippines (TMAP).
TMAP is spearheading the campaign of business chambers, groups of employers and employees to push for the adjusting of the income-tax brackets and the lowering of the income-tax rates to arrive at a progressive system of taxation.
Colmenares said there is no real opposition from congressmen and senators, since the proposed tax reforms are very popular among the poor and the middle class.
“Nobody is categorically declaring that he will oppose this,” he said.
He said that the only real opposition against the bill comes from the President himself, who has recently declared that the proposed adjusting of the tax brackets is not good for the economy at this time.
1 comment
The pinoys know this could improve their capability to increase their economic status as well as improve their chances of survivability esp those below the middle class. The president just have to acknowledge the painful truth that even if they have revenue deficits or excess, either way, more than 20% of these revenue collections still goes to the pockets of corruption.
By lowering tax rates, u improve the lives of majority of filipinos while minimizing the feeding frenzy of corruption. We all know that even if with imprisonment of the 3 senators, corruption will never stop even at the lower level