MORE than six million public and private workers earning P30,000 a month and below will not be required to pay income tax once Vice President Jejomar Binay wins the presidency, Binay’s spokesman said Thursday.
“With the current taxation system, up to 85 percent of the total individual income taxes is paid by the working class, while only 15 percent comes from self-employed individuals and their workforce,” Joey Salgado said.
“[Binay’s plan] will also encourage more foreign investments, resulting in more jobs for our people and more revenues for the government.”
Salgado said Binay’s tax reform plan would also result in the improved competitiveness of Philippine corporations and their workforce.
He slammed Binay’s political opponents for opposing his tax plan, saying they would always find reasons to reject a plan that will improve the lives of overtaxed workers.
“This is no surprise as they come from a group whose knee-jerk reaction is to protect the status quo where factory workers, government employees and call center agents pay the same taxes as millionaires,” Salgado said.
“This is the mark of an insensitive leadership.”
Salgado said the impact of Binay’s tax plan would be wide-ranging and would bring relief to six million workers in the public and private sectors, among them factory workers, call center agents, teachers, policemen, soldiers and government clerks.
“We are pushing for a comprehensive tax system reform that will gradually reduce the personal and corporate income tax rates in the Philippines to a level that is more consistent with our Asean peers,” Salgado said.
“We will push for this program and give relief to millions of workers.”
Binay has previously said he will convene the Legislative-Executive Development Advisory Council within the 100 days of his administration for the swift passage of the tax reform bill. He has vowed to certify the tax reform bill as urgent should he be elected president in the May 2016 elections.
Binay’s economic adviser, former finance secretary Margarito Teves, says reforming the current tax system will not lead to a higher value-added tax.
“Raising VAT is not the only way to compensate for revenue loss. We already have a menu of options to compensate for the potential revenue losses from reducing the tax rates,” Teves said.
He said those options include the sale of government assets and the privatization of a number of government-owned and -controlled corporations, the approval of revenue-generating measures, fuel marking to fight oil smuggling and improving tax administration and collection efficiency.
Binay had earlier defended his tax plan against its detractors who predict massive revenue losses as a result of his plan. He cited the billions of pesos the government loses each year to smuggling and poor tax collection.