EDITORIAL - No real reform in reform tax package
(The Freeman) - September 29, 2016 - 12:00am

Reform is a positive thing. It is something good, not bad. It is progressive, not retrogressive. That is how most people understand it. That is how all dictionaries define it. It is the improvement or correction of what is wrong, evil or corrupt. It is a rectification, an abandonment of that which is incorrect. It is a change for the better.

In this context, which is the only context there is, the government's proposed comprehensive tax reform measure is almost a complete misnomer. Yes, it does seek to lower income taxes, which, as among the highest in Asia, if not the world, had long been the bane of the country's wage earners. But while it does give in some areas, it takes away in others, making it not a completely good thing.

The worst part of the proposed tax reform measure is its intent to withdraw from senior citizens and persons with disabilities their value added tax exemption privileges. Nothing can be more incomprehensibly insensitive and mean than this particular proposal. Of all people the measure seeks to deprive some badly-needed privileges from, it had to pick on the senior citizens and PWDs. How very cruel indeed.

As a reform package, the measure ought not to make any deprivations. It ought not to take anything away that is already beneficially enjoyed. If, because of the lowering of income taxes, the revenues that are due the government are severely affected, the government can always compensate by stepping up its tax collection efforts. It can always crack the whip in this regard. That is if it truly wants to.

But even if it doesn't want to, it has to. That is because fighting corruption is one of the foundations upon which the Duterte administration is built. The promise to eliminate corruption is one of its main sources of popularity, and therefore strength. And it knows, as do the rest of the Filipinos, that corruption is the single biggest reason why government cannot collect the kind of revenues it is supposed to be collecting.

Most senior citizens are already retired and live off pensions that are more often than not inadequate and unable to keep what remains of their life at least comfortable. PWDs, on the other hand, do not have the means to compete with the rest of the population for a better life. Instead of being deprived of the little that they have, they should in fact be given more.

Another area where the measure seeks to recover what it expects to lose by lowering income taxes is slapping higher taxes on fuel products. It does not take much of an education to know that this will result in a spike in fuel prices, which in turn will drive prices of everything else up. When that happens, the whole country will be worse off than before, in which case no reform really takes place, only a worsening of the Philippine condition.

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