Debate on income tax cut & ‘buwis-pawis’
ANATIONAL debate is developing on proposals to lower income tax rates, primarily for workers and low-income earners in the country.
Let concerned officials and groups tackle the issue for the benefit of taxpayers and the country as a whole.
*** President Aquino III thumbs down proposals to lower the country’s income tax rates, and subsequently increase the 12 percent Value-Added Tax (VAT).
Beware of their adverse impact on the economy and the people, says P Noy.
*** But Vice President Jejomar Binay, a declared opposition presidential candidate, says lowering income tax for ordinary or common workers is the “just” thing to do.
The Philippines’ indiviual income tax rates, reaching 32 percent for income exceeding 500,000, are among the highest in Asia, he says.
*** President Aquino points out that his government has already committed not to impose new or higher taxes under his watch.
“I’m not convinced” that the proposed tax adjustments would benefit the people in the long run, he says.
*** The President explains that reducing income taxes may initially sound good since it will increase a person’s disposable income.
But it will affect the country’s fiscal health and credit rating, P Noy warns.
*** “The question is if we reduce the income tax, our revenues will decrease and our deficit will grow. The ballooning of the deficit will be a negative factor when credit rating agencies rate our country,” Aquino says.
What’s good for income tax payers won’t be good for the country, he claims.
*** “In exchange for lowering income taxes, there is a proposal to increase VAT and increase the levy on oil products. So when we increase the taxes on oil products, all other consumer prices might increase as well due to higher transportation and electricity rates,” Aquino adds.
“So I am not convinced at this time,” on tax adjus ments, Aquino says.
*** The President cites that, in fairness, he did not raise taxes since he assumed office in 2010, except on sin products such as alcohol and cigarrettes which brought much- needed revenue.
“Today, we have managed our deficit... we were given an investment grade status by rating agencies,” he explains.
*** Some lawmakers, primarily Sen. Sonny Angara, Rep. Miro Quimbo, and members of the Makabayan Bloc, insist that income tax rates be lowered to alleviate the plight of the poor.
Less tax deduction and more purchasing power for the people, they urge.
*** Vice Pres. Binay agrees to the lowering of income tax rates for common workers, in a statement before the Pandesal Media Forum in Quezon City.
“Our tax system must be seen as fair – meaning, those with fat pay checks pay higher taxes than those whose pay checks are less – and inflation-adjusted tax brackets, even if it will result in short-term reduction of tax revenues, is only just,” he argues.
*** Binay says he agrees with the Management Association of the Philippines that the country’s 32 percent income tax is among the highest in Asia.
Lower taxes for common workers like teachers, police, soldiers and nurses, he suggests.
*** “We also aim to gradually reduce the current corporate income tax rate from 30 percent to a realistic and reasonable rate consistent with our ASEAN peers,” Binay adds.
“More tax reforms,” promises the Vice President and “presidentiable.”
Other presidential candidates and politicians are expected to join soon in the raging tax debate.
Taxation will likely emerge as a major 2016 election issue.
*** Time to hear more comments and gems of wisdom on tax cuts and reforms from various sectors.Time for a lively and intelligent debate on “buwis-pawis.”