MANILA, Philippines – President Aquino is scheduled to meet today with Senate President Franklin Drilon and Speaker Feliciano Belmonte Jr. on moves in Congress to reduce individual income tax.
The leaders of Congress were the ones who sought the meeting. They said they hoped to persuade Aquino to study the proposal to adjust the rates just for inflation. The rates have not been adjusted since 1997.
Proponents of the adjustment say it is reasonable for the government to tweak the income tax structure, taking into consideration inflation or the increase in consumer prices and wages.
Aquino has asked lawmakers to provide the government with the means to recover billions in lost tax income, if they intend to pass measures that would result in revenue loss.
Some candidates in next year’s elections are criticizing the President for this stand.
Isabela Rep. Rodolfo Albano III said it would be “easy and convenient for the President to agree to proposals to reduce income tax and pass the burden of recouping lost revenues to the next administration.”
“P-Noy would gain more popularity and support for his candidates if he did that. But being a prudent leader, he has to study the consequences of those proposals on the budget deficit and the economy as a whole,” he said.
However, Albano urged Aquino to seriously consider the suggestion to adjust tax rates for inflation.
“I think it’s a reasonable proposal. We did that with the excise tax rates on the so-called sin products,” he said.
Marikina Rep. Romero Quimbo, who chairs the House of Representatives ways and means committee, and his Senate counterpart, Juan Edgardo Angara, have separately filed bills seeking to adjust the rates for inflation.
Quimbo said wage increases since 1997 have pushed workers to higher rates that have “remained flat” due to the failure of previous administrations and Congresses to provide tax relief.
The Tax Management Association of the Philippines, which supports the Quimbo and Angara bills, said a worker who paid 10 percent 18 years ago now pays about 20 percent.
The two measures would retain the seven tax brackets under the present law but would increase the amounts of taxable incomes covered by each bracket.
Under the Angara bill, salaried workers and other individual taxpayers with annual taxable income (after personal and additional deductions) of not more than P23,000 would pay a fixed rate of five percent.