Bets agree on tax reform, but differ on policy

MANILA, Philippines - Leading candidates for national elections all agree that a comprehensive tax reform is overdue, but they differ on policies they will push should they win the polls two weeks from now.

The Tax Management Association of the Philippines (TMAP) has released the results of its tax policy survey with answers from presidential aspirants Vice President Jejomar Binay, Sens. Grace Poe and Miriam Defensor-Santiago and vice presidential bet Ferdinand Marcos Jr. and senatorial candidate former justice secretary Leila de Lima.

“I think all of them are of the view that there is a need for tax reform. It’s a very important step forward,” TMAP president Benedict Tugonon told reporters in a briefing last Wednesday.

“On disagreements on certain issues, we take that as healthy and we know that once it reaches legislation, compromises will be here and there,” he said.

Poe, in particular, favored lowering both the personal and corporate income taxes to 25 percent from the current maximum of 32 and 30 percent, respectively.

She was also for the adjustment of income tax brackets to reflect inflation, something which all the other candidates support, but Marcos opposes.

“Any tax measurement should be carefully studied and adjusted,” Marcos said.

On value-added tax (VAT), all candidates except Santiago opposed raising it from the current 12 percent. The independent candidate said she would increase VAT to 15 percent by 2019.

Nevertheless, Santiago was joined by De Lima and Poe in saying VAT exemptions should be revisited to broaden the tax base. Binay and Marcos opposed this, with the latter citing no reason.

“Raising the VAT is not the only way to generate more revenue. We have a menu of options to consider,” Binay said.

Meanwhile, all three presidential candidates agreed that excise taxes in oil should be raised.

De Lima and Marcos said “no.” De Lima cited the “very volatile” crude prices.

Binay, Marcos and De Lima also answered in the negative for excise levies on luxury items and “non-essential” goods. Santiago and Poe said this is worth studying.

Candidates, on the other hand, are split on the case of abolishing estate taxes. Santiago and Binay said yes, while Poe, De Lima and Marcos said no.

All supported rationalizing fiscal incentives and making hybrid and electric vehicles tax-exempt.

On the lifting of the bank secrecy law for tax purposes, only De Lima said it is not necessary since there are “exceptions that would already assist tax agencies in tax collection.” She didn’t give details.

TMAP’s Tugonon said other candidates relayed they would submit their answers by next week. All answers are uploaded at the organization’s website, www.tmap.org.ph.

“It’s a reality that tax legislation measures we don’t expect to be passed immediately will go through a difficult process. There will be discussions,” he explained.

“We need the support of the executive branch, the legislators and even the people themselves to make this happen,” he said.

Tugonon also said the survey results could serve as a checklist for taxpayers to make officials accountable once they get elected. “We can use this to assess their support for tax reform later on,” he said.