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Phillipines: More groups support lower income tax rate – DoF
The Department of Finance (DoF) said various organizations are backing the “long-overdue” reforms in personal income tax (PIT) rates and other measures under the proposed Comprehensive Tax Reform Program.
The tax reform package, as contained in House Bill (HB) 4774, aims to lower PIT rates from 32 percent to 25 percent, except for the ultra-rich, and exempt compensation earners with a net taxable income of P250,000 and below from paying an income tax.
Trade Union Congress of the Philippines (TUCP) Executive Board member Arthur Juego said at a recent hearing of the House Ways and Means Committee that TUCP welcomes the government initiative to introduce reforms in the tax system, most especially the current income tax structure.
Juego was quoted as saying that the proposed PIT reforms will “provide economic relief to workers who need to increase their take-home pay as prices of basic necessities and services such as food, water, electricity, medicine, housing and transportation are constantly increasing.”
Meanwhile, Financial Executives of the Philippines (FINEX) President Benedicta Du-Baladad said the organization fully supports HB 4774, because it’s simple and progressive approach to leveling the playing field.
“For progressivity, we thought that re-bracketing the income brackets to make sure that basic income that is considered subsistence level, sufficient enough to cover the subsistence level of a certain individual or family, has been exempted,” Baladad said.
“On the other hand also, for the middle-income individuals that the tax has been reduced compared to those which are on the higher income [brackets],” she said.
On the other hand, National Tax Research Center Executive Director Trinidad Rodriguez noted that under HB 4774 the P250,000 threshold is net of de minimis benefits, mandatory contributions and the first P82,000 of the 13th month pay and other bonuses. Effectively, what will be exempt in terms of gross compensation income is actually greater than P250,000, she said.
That will benefit almost 99 percent of the compensation income earners, she said.
“We fully support the lowering of the personal income tax. This has been long overdue; it’s been [unchanged]for almost two decades. It’s just right that we reduce the tax rate and widen the taxable income brackets to address the so-called bracket creep. And this will also correct some of the inefficiencies and inequities in our present tax system,” Rodriguez said.
The Institute for Labor Studies (ILS), an attached agency of the Department of Labor and Employment (DoLE) also supports HB 4774.
OIC-Deputy Executive Director Brenalyn Peji said ILS is backing HB 4774. “The DoLE, in general, supports those bills that will promote the welfare of our minimum wage earners, and even those who are earning above-minimum wage,” she said.
The DoLE is one with the position that a fairer, simpler and more effective taxation system will encourage or promote a more conducive environment for investments. Eventually, it will promote employment generation which can address standing issues on unemployment and underemployment, Peji noted.
The Nutritionist-Dietitians’ Association of the Philippines informed the committee that it also supports HB 4774, particularly the restructuring of income brackets and reduced tax income taxes.”
“[Our organization has for its members] the people who are employed mostly in hospitals and public health agencies and institutions, so we depend on income from salaries earned,” said president Dr. Adela Jamorabo Ruiz.
“We appreciate this creation of a tax system that is simpler, fairer and more efficient. We do hope that these reforms will be expedited considering that professionals are taxed heavily,” she said.
Source: http://www.manilatimes.net/groups-support-lower-income-tax-rate-dof/317319/