The House of Representatives will fight ‘til the end for the proposed measure adjusting the levels of taxable income to inflation, House Speaker Feliciano Belmonte, Jr. said.
Belmonte said Wednesday that the leaders of the House of Representatives and the Senate will meet again with President Benigno Aquino III to try to convince the latter to support the proposal.
Belmonte, in a text message, said that he and Senate President Franklin Drilon will meet the President this month.
“Senate President Drilon is currently abroad. But we may schedule the meeting with President Aquino during this [Congress] break [which is from Oct. 10 to Nov. 2,” Belmonte said.
Belmonte said he believes now is the right time to adjust the tax bracket to inflation to increase the take home pay of ordinary workers.
“With this proposal, we are [only] giving the applicable value of these things at the time the National Internal Revenue Code was approved [in 1997],” Belmonte said, noting that the proposal has a fight chance at the Lower House.
This developed as Marikina Rep. Miro Quimbo, chair of the House Committee on Ways and Means, said that the P500,000, which is currently taxable by 32 percent, needs to be adjusted, considering that this amounts to P1.2 million at present.
“There’s a lot of backroom talks between the Senate President and the Speaker to convince the President to adjust it [tax bracket] to inflation,” Quimbo told reporters.
Quimbo said the House would push for the passage of the measure.
“The Speaker and the Senate president have come to a common position so the next step is really to talk to the President and present what the options are,” he added.
Citing the Department of Finance, Quimbo said that the proposal may cause the government to lose revenues totaling as much as 1.5 percent of the country’s Gross Domestic Product or P30 billion.
“There’s still chance that this proposal will be passed at the lower Chamber this 16th Congress. It is the first of several steps under our comprehensive package that would benefit both the government and the people,” Quimbo said.
Quimbo said that included to the comprehensive package are the so-called revenue-generating measures such as bill raising excise tax on fuel, measure simplifying tax requirements of professionals and entrepreneurs, reduction of tax rates for both individual and corporate, measure overhauling the VAT system, Rationalization of the Mining Fiscal Regime bill, and bill imposing specific tax on sodas and other sweetened beverages.
“Speaker Belmonte and Senate President Drillon have a common position that, first, tax reform cannot take place piecemeal, just like what we’ve been saying it has to be a package or programatic. The entire thing has to be overhauled but it does not mean that we cannot take steps towards that’s objective meaning we have first phase, second phase, third phase [to complete the comprehensive package] so doon sila na convince and they will present that with the President,” Quimbo said.
Malacañang had earlier rejected the passage in Congress of a long-pending bill seeking to adjust in individual and corporate income-tax rates.
Studies have shown that the Philippines has the second highest individual income tax rate in the region at 32 percent; next to Thailand and Vietnam’s 35 percent, and the highest value added tax at 12 percent as the country’s current individual income tax bracket has remained unchanged since 1997.