If tax cut gets approved: Government to lose P50 billion annually

CEBU, Philippines – The government is expected to lose at least P50 billion every year if the proposal to lower the income tax rates gets approved.

Deputy Commissioner for Operations Nelson Aspe, of the Bureau of Internal Revenue, said the proponents of the tax cut should also provide an option where to source out the budget in lieu of the lost income.

“If given an opportunity to comment on the said proposal, siyempre ayaw namin. Sana yung mga proponents may proposal din sila kung saan kukunin ang budget para doon sa mawawalang income. BIR will be losing P40 billion to P50 billion kung e-cut natin ang income tax. So, anong agency ba ang aalisan natin ng budget,” said Aspe.

Senator Juan Edgardo “Sonny” Angara has proposed lowering the individual income tax to 10 percent from the current 15 percent for those earning P20,000 to P70,000 annually and 25 percent from 32 percent for those with more than P1 million. The proposed bill is still pending before the Senate.

The country has the highest income tax rate at 32 percent among Southeast Asian nations.

“Compare to other countries, mataas daw ang income tax rate natin. But our budget is getting higher too,” Aspe said.

The Partido ng Manggagawa said that high income class and corporations should pay more while those whose income fall below the prevailing cost of living must be exempted from direct taxes.

In a statement, PM said that workers are baffled by President Benigno Aquino’s categorical rejection of the proposed tax cut. According to the labor group, Aquino simply views taxation as a tool for revenue generation and not as an equalizer or instrument for social justice.

“It is expected of him.  PNoy was never an ally of the working class.  He rejects wage hike and he doesn’t even see labor contractualization as a problem,” the statement read. —/FPL (FREEMAN)