A HOUSE leader on Thursday expressed hope Congress would enact the proposed measure seeking to lower income taxes for individuals after the Department of Finance gave the go-ahead to the proposal.
Marikina Rep. Miro Quimbo said the DoF’s position favorable to his proposal was a welcome development.
“This is truly a cause for celebration. Finally, after years of denial by the DoF of my proposal to do gross taxation, the finance agency has heard our side. I congratulate Secretary Dominguez’s leadership of DoF. If not for him, our long rejected proposal to reduce and simplify our tax brackets and rates would not have seen the light of day,” Quimbo, a House deputy speaker, said.
At a congressional hearing Wednesday, the DoF presented before the House committee on ways and means its tax reform package, which restructures the tax rates and exempts individuals earning a gross income of P250,000 and below.
Once enacted, the proposal shall exempt workers earning P250,000 and below for the years 2018 and 2019 from paying personal income taxes.
“Though I strongly believe that my original proposal to exempt from taxes those earning P300,000 is more just and equitable, the DoF’s concession of P250,000 is already a great victory for tax reform advocates. What we have long fought for has been finally acknowledged,” Quimbo said.
Quimbo said the fight for income tax reform had been an uphill battle for the past three years.
But the DoF’s change of heart was indeed an initial victory for the Filipino people, he added.
Quimbo said the tax reform could be done in phases so as not to severely affect the country’s fiscal health, and not to protract the much-needed inflation-adjustment of individual income tax.
He said the last phase of his proposal pushed for restructuring of tax rates and gross income taxation with an exemption of P300,000 gross income.
He said his proposal was similar to the measure presented by the DoF during the meeting Wednesday of the House committee on ways and means.
In the current system of individual income taxation, only those who are earning the statutory minimum wage are exempted by virtue of Republic Act 9504, Quimbo added.
“In the existing system, 6.2-million Filipino workers mostly carry the burden of paying the individual income tax collection of BIR. They represent only 16 percent of all wage and salary workers, and essentially serve as the milking cow of the BIR. With the headway in the income tax reform, we are a step close to ensuring that our Filipino workers are able to live decently, and sufficiently provide for their families,” Quimbo added.
Meanwhile, Quimbo scored the DoF’s proposal to impose excise tax on fuel as compensatory measure for the foregone revenues due to the lowering of income tax.
DOF proposes a staggered increase of P6.00 per liter of diesel, kerosene, and LPG to be imposed within a 3-year period.
“While I totally agree with the government’s need to shore up its tax collection, we do not need to impose new taxes. We simply have to do better collection by plugging the leaks at Customs and in the [Bureau of Internal Revenue],” Quimbo said.
He noted in Customs alone, the country was losing P200 billion pesos a year to smuggling.
“Oil smuggling alone accounts for a substantial portion of smuggled commodities. What use are these new taxes on oil products if the BIR and Customs continue to be a hotbed of corruption?” Quimbo said.
Quimbo also pointed out that “new taxes will only penalize the tax compliant oil companies yet reward the tax evading ones.”
“The proposed fuel tax is also anti-poor. LPG, Diesel and Kerosene are fuel products that are used mostly by the poor. Tax reform will not be successful if you merely transfer the tax injustice from the middle class to the poor. That is what the proposed fuel tax will result in. It is unacceptable,” Quimbo said.