Senatorial candidate Leyte Rep. Martin Romualdez on Thursday vowed to pursue his advocacy of lowering personal income taxes—the highest in Southeast Asia—as “malasakit” (compassion) to fixed-income public and private workers like teachers whose purchasing power has been eroded by inflation.
Romualdez, a lawyer and president of the Philippine Constitution Association, said Congress should pass the income tax reform bill in the next 17th Congress to “adjust the various levels of taxable income to inflation” because the income tax rates are stuck in 1997 levels.
Romualdez, head of the House Independent Bloc, said Congress should work on passing a proposed income tax reform law that would raise the tax exemption ceiling to P150,000 a year and lower the income tax rate currently pegged at 32 percent.
“I do not find logic that the proposal would risk the gains of a robust economy when ordinary workers are suffering from the burden of paying higher tax. We need to extend compassion among ordinary workers,” Romualdez, who ran unopposed in the last polls and a former chairman of the House committee on ethics and privileges, explained after the Aquino administration vehemently rejected the proposal because this would risk the country’s fiscal sustainability and credit rating as a result of potential revenue losses.
“Ordinary wage earners should be given more disposable income to uplift their standard of living by granting them exemption from the payment of income tax,” Romualdez, a three-term congressman who is running for the Senate under a platform anchored on compassionate governance, said.
“We have to underscore the need to revise the tax collection system to make it more responsive in extending malasakit to ordinary workers, fair and equitable and not too burdensome to them. Unfortunately, ordinary workers are bearing the brunt of paying too much taxes,” Romualdez, a shared senatorial candidate of Vice President Jejomar Binay, Davao City Mayor Rodrigo Duterte and Senator Miriam Defensor-Santiago who are all running for president, said.
The measure seeking to lower the personal income tax rates has been filed at the House of Representatives this 16th Congress. The bill seeks to raise from P500,000 to P10 million—the trigger for the higher income tax rate—and reduce the corporate tax rate from 32 percent to 25 percent.
Under the pending measure, the country will have four income tax brackets. This means those earning P180,000 and below annually are exempted from paying taxes, while those who annually earn from P180,000 to P500,000 would pay nine percent.
Similarly, individuals whose yearly income is from P500,000 to P10 million would pay 17 percent, while those with more than P10 million annual income will have to pay 30 percent.
The rates are based on family and income expenditure survey, labor force survey and census which means that it will be based on gross income regardless of status in life of a taxpayer.
But Marikina City Rep. Miro Quimbo, chair of the House committee on ways and means, had earlier bared based on government records that 60 percent of professionals and 70 percent of entrepreneurs are not paying their tax dues compared to fixed-income earners who comprise the tax base of the government.
The government data noted that only 5.6 million out 23 million earning individuals have been paying taxes because they are either exempted being minimum wage earners or they do not pay taxes at all.