While tax managers, employers, chambers of commerce, workers and almost everyone seems convinced we need to overhaul our tax system to solve its inequities, in particular those that overtax fixed-income earners, this administration is oh-so-quick to reject the proposal.
No discussion, no compromise, no consideration, but an outright rejection.
Why? Because this administration says it could not risk losing the gains of our so-called robust economy.
Not only congressmen but both the Joint Foreign Chambers (JFC) and the Tax Management Association of the Philippines (TMAP) have called for the lowering of individual and corporate tax rates as part of a comprehensive tax reform.
These calls have fallen on deaf ears. This tells you the Aquino administration’s heart is not in the right place.
Workers our being bled dry, Mr. President.
The Philippines has the second-lowest household and per-capita income in the Association of Southeast Asian Nations (Asean), according to the latest global poll results released by Washington-based research group Gallup; and yet, our country has the highest individual income tax rate in the region.
A position paper submitted by the Tax Management Association of the Philippines (TMAP) showed that a Filipino worker earning a little over P500,000 a year is taxed 32 percent while a worker earning an equivalent P500,000 in Singapore pays only 2 percent income tax.
The Thai counterpart earning the equivalent income is only taxed 10 percent. In Malaysia, he would be taxed only 11 percent. In Brunei, workers who earn “only” P500,000 do not have to pay any income taxes.
It doesn’t take a genius to deduce what happens when you charge high taxes on low incomes: Hardly any money is left for the poor working class.
And yet does this administration care? Apparently not.
As Vice President Jojo Binay correctly observed, while Malacañang has denied it several times, the belief that the administration has blocked the passage of pending legislation lowering the income tax cannot be disregarded.
“The solid evidence: not less than 17 proposed bills pending today, yet not one of them could expect to be passed by the present Congress,” Binay said.
Mr. President, this so-called robust economy of our country has not benefitted most working families, not the overseas Filipino workers and not those toiling here in their homeland who can barely eke out a living. And you have not provided any kind of relief for them.
Your administration is almost over and it is still plagued by the very same problems it started with—you need to spend more and speed up projects to boost the economy.
How many projects under your public private partnership (PPP) program has been completed?
Your administration has failed to stimulate economic activity in our country as shown by the first-quarter economic numbers.
Gross domestic product grew by only 5.2 percent, more than 20 percent below expectations. Economists blamed the slowdown in the growth to underspending by the National Government.
Do you not know how to spend without pork barrel or the Disbursement Acceleration Program (DAP), which the Supreme Court has declared unconstitutional?
The drop in infrastructure spending brings down GDP and employment.
Workers and taxpayers are doing their part. We have been paying our taxes.
The government collected 18 percent more in taxes and revenues in the first quarter, or around P408 billion. The country’s tax effort has been on an upward trend in the past four years from 12.2 percent in 2010 to 13.6 percent in 2014.
But where is the money going? What is the government doing with our taxes?
Can workers even count on the government to provide safe, efficient mass transportation to get them to their workplaces? Or provide streets and roads that are not plagued with pollution, standstill traffic, floods and crime? Can workers who need healthcare go to any public hospital and get quality treatment? Can they send their kids to public schools and get quality education? Can workers rely upon the government to take care of them if they lose their jobs or once they are old and retired?
Your answer, dear readers, is as good as mine but again, does this administration care? I don’t think so.
I will not get tired of saying this until I get hoarse.
If the government cannot guarantee the basic things a government should provide its citizens, then it is better off reducing taxes so that the people can have more money to spend and take care of themselves.
Reducing income taxes would put more money in the pockets of workers to help them cope with the high cost of living. This money would be spent on goods and services thereby boosting the economy.
More money for workers to spend means increased demand for goods and services, which results in more jobs for more people to spend more money, which results in more people paying taxes and the government making more money.
If the government is inefficient it is better off taking a backseat.