18 business, labor groups push tax reform
September 28, 2015 at 15:39
18 business, labor groups push tax reform
ADJUST, RESTRUCTURE INEQUITABLE INCOME TAX BRACKETS
By: Ben O. de Vera | 05:18 AM September 24th, 2015
Eighteen business and labor groups yesterday urged legislators to push through with the passage of pending bills aimed at slashing income taxes while also supporting measures that would allow the government to collect more revenues, including a higher excise tax on oil.
“While Congress considers other revenue-raising measures and contemplates lifting the secrecy of bank deposits to combat tax evasion, these proposals should not be pre-conditions to immediately enact pending measures in Congress that will correct the inherent inequity in the personal income tax system,” the 18 groups led by the Tax Management Association of the Philippines (TMAP) said in their “Unity Statement for Income Tax Reform.”
“In reducing tax rates, however, the government may simultaneously consider compensating revenue measures that would not adversely impact the poor and marginalized sectors of society, such as imposing additional excise tax on gasoline as fuel prices are expected to stay very low for at least several years,” they said.
In their joint position paper, the 18 groups urged members of the Lower House and the Senate to “immediately pass” a bill that would adjust and restructure the income tax brackets for individuals, index the income tax brackets on the basis of inflation every three years and reduce personal and corporate income tax rates.
“Contrary to the view that reducing personal and corporate income tax rates will increase the budgetary deficit due to a reduction of tax revenues, studies have shown that a reduction in tax rates, together with the simplification of the tax system, will help spur tax compliance and, thus, broaden the tax base and improve tax effort. A reduction in the rates will also increase disposable income for domestic purchases of goods and services that will, in turn, increase the government’s tax take of consumption taxes,” the groups claimed.
“With this, we appeal to President Aquino to reconsider his position and heed the voice of various sectors clamoring for income tax reform. Restoring fairness in the tax system and making it competitive with Asean neighbors will help ensure inclusive economic growth for our country and our people,” they added.
Besides TMAP, the 17 other groups that signed the unity statement were: Pilipino Banana Growers and Exporters Association, Japanese Chamber of Commerce and Industry of the Philippines, American Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Alliance of Workers in the Informal Economy/Sector, Foundation for Economic Freedom, Canadian Chamber of Commerce of the Philippines, Korean Chamber of Commerce of the Philippines, Philippine Association of Multinational Companies Regional Headquarters, Federation of Filipino-Chinese Chambers of Commerce and Industry, Management Association of the Philippines, Philippine Chamber of Commerce and Industry, Confederation for Unity, Recognition and Advancement of Government Employees or Courage, Australia-New Zealand Chamber of Commerce, Center for Strategic Reform, Financial Executives of the Philippines and Makati Business Club.
The Department of Finance (DOF) has been proposing a comprehensive tax reform package, which was being pitched to legislators as early as late last year, aimed at easing the burden of income taxpayers while also slapping new or higher taxes on consumption.
Pending bills in the House of Representatives and the Senate were looking to reduce income tax rates, but legislators have been shunning revenue-generating measures.
The DOF’s comprehensive tax reform proposal includes a mix of policy measures entailing legislation as well as tax administration improvements, which the DOF had claimed would lead to a “competitive, equitable and progressive” tax regime.
Internal Revenue Commissioner Kim Jacinto-Henares earlier disclosed that the government would gain up to P300 billion a year if previously foregone revenues from upper-tier, non-fixed income earners who pervasively evade tax payments could be collected.
DOF estimates showed that only 400,000 of the 1.8 million self-employed in the country pay their correct taxes.
Source: www.business.inquirer.net
