Business sector hopeful on lower income tax
For both personal and corporate
Businessmen yesterday expressed confidence Malacañang is going to give in to the clamor to bring down personal and corporate income tax rates/ brackets in the country.
Alfredo Yao, President of the Philippine Chamber of Commerce and Industry (PCCI), told reporters covering the 41st Philippine Business Conference at Marriott Hotel that the fact that both leaders of Congress Senator Franklin Drilon and Speaker Feliciano Belmonte Jr. have given their support to the proposed bill to reduce income tax rates is already a “very good indication.”
"We are confident the President will listen. If ever the President will push for it, then Congress will fast track deliberations,” Yao said noting that reducing income tax would pave the way to higher profitability for companies.
“Whatever savings will translate to higher profitability of companies because this means lower borrowings. This will have multiple impact on the economy,” he said.
The 41st PBC, which is hosted annually by the country’s largest business organizations, has also identified reform in the country’s income tax regime in its set of Resolutions for Malacañang’s consideration.
The PCCI is currently undertaking a study for a comprehensive income tax review of the government.
Already, PCCI Honorary Chairman Donald Dee said that the reduction in the income tax rates should boost income of companies by at least 4 percent. The current corporate income tax is at 32 percent, making the Philippines with the highest income tax rates in ASEAN. The reform in the individual income tax would be through changes in the bracketing of incomes to pave the way to lower personal income tax payments.
Dee explained that the savings will directly go into the bottom-line of companies ensuring continuous working capital flow.
Dee further noted that as election is approaching, more congressmen from the President’s Liberal Party will cooperate to reduce income tax rates if not add pressure to the party, which is headed by the President because it means goodwill to voters.
The Philippines also has the highest personal income rate in the region, at 32 percent for those earning over 400,000. Advocates for the lowering of the personal income tax rate claim that whatever revenue loss arising from the tax reduction would translate into increase purchasing power for the taxpayers and the government can recoup part or all of the losses from value added tax consumption.