Negros Occidental Rep. Julio Ledesma IV assured yesterday that the House of Representatives will speed up the enactment of a bill seeking to install a Hong Kong-style gross income taxation system in the country as soon as they receive the draft law from Malacañang.
Ledesma told reporters yesterday the ways and means committee, which he chairs, will immediately call hearings and invite concerned administration officials to shed light on the proposed system of income taxation.
"In principle, a gross income tax system similar to that of Hong Kong is simpler and more efficient and effective," he said. "We will fast-track it. We expect to receive (the bill) next week, and following a directive (from) Speaker Jose de Venecia, we will immediately work on it."
Ledesma said the bill is being drafted by tax experts at the Department of Finance for Mrs. Arroyo’s scrutiny and approval before being filed at the House of Representatives.
"We want to see the DOF simulations, whether this will be revenue-oriented, will result in the increase in collections or will mean losses," he said.
Tax collectors will lose discretion on the amount of income tax that should be paid, he added.
At the Senate, Sen. Ralph Recto, chairman of the Senate committee on ways and means, has filed a similar bill to remove all deductions allowed for individual and corporate tax payers.
Recto said the Gross Income Taxation Bill does not run counter to the constitutional requirement that all tax measures should come from the House.
"The constitutional provision does not prevent us from holding public hearings on any revenue measure," he said. "We will not discuss the bill on the Senate floor until the House has passed its counterpart measure."
Recto said he is confident that once the bill becomes law, the corporate tax base would increase to about 120,000 firms and tax collection would total P120 million a year.
"We still have not calculated the effect on individual income tax once the shift is effected," he said. "A shift to modified income taxation would increase the revenues to P30 billion in corporate taxes alone."
Meanwhile, Sen. Juan Flavier will file a bill which aims to increase the personal exemptions of wage earners as follows:
• From P20,000 to P48,000 - single or legally separated with qualified dependents;
• From P28,000 to P54,000 - head of the family;
• From P32,000 to P64,000 - each married individual.
Flavier said his bill also seeks to increase the additional exemption for each dependent not exceeding four, from P8,000 to P16,000.
The bill was previously filed by former Sen. Juan Ponce Enrile but the 11th Congress did not act on it, he added. –Jess Diaz, Efren Danao, Marianne Go