Independent vice presidential contender Francis “Chiz” Escudero on Sunday vowed to bring about a reduction in income tax rates to increase the take-home pay of millions of Filipino salaried workers, who are among the most heavily taxed people in Asia.
Escudero said that lowering the personal income tax rate, which at 32 percent is one of the highest in the continent, will be on top of the legislative agenda of her running mate, Senator Grace Poe, if she becomes president.
In the House of Representatives, a similar advocacy was being espoused by Leyte Rep. Ferdinand Martin Romualdez as part of his “malasakit” to the working class. Romualdez, a senatorial candidate, is opposed to any new tax measures.
Escudero said that if the government cannot raise the salaries of private sector employees, it might as well ease their tax burden to boost their take-home pay and help them keep up with the rising cost of living.
There are around 39 million people comprising the nation’s labor force and about 36 million of them are in the private sector.
While the country’s estimated 1.53 million state workers have been recently granted an increase in pay and benefits, private sector employees only received minimal pay increases in the last five years, the latest of which was in April 2015 when P15 was added to the daily minimum wage in Metro Manila.
The wage adjustment, the fifth under the Aquino administration, raised the minimum pay to P481 for workers in the non-agriculture sector from P404 in 2010.
Since 1997, when the Tax Reform Act was passed, tax brackets in the Philippines have not changed. Salaries, however, have been adjusted to inflation, pushing more wage and salary workers into higher brackets, which compel them to pay higher taxes, Escudero said.
According to the Joint Foreign Chambers of the Philippines, the 32-percent individual tax rate in the country for income over P500,000 is the second highest in Southeast Asia and the seventh highest in the entire continent.