MANILA: President Benigno Aquino III on Monday stressed that there is still no need to introduce new tax measures.
In an interview by reporters at the Iloilo Convention Center, the President said that, for one, he was not convinced that cutting the income tax level would be a good move right now.
“At ako’y hindi kumbinsido sa ngayon. Iyong VAT at saka itong taxes nga diyan sa oil products, ’yung duties, et cetera, ‘yung tariffs, parang sa tingin ko ‘yung tinatawag na regressive taxation ‘yan,” he said.
He explained that the Constitution calls for a progressive taxation wherein people with higher income pay more.
This taxation system, he cited, would be countered if the value added tax (VAT) and taxes on oil were increased.
“Iyong mga tax tulad sa VAT damay lahat kung ano man ang sitwasyon mo sa buhay, kung ano man ang level ng society. So parang ‘yung VAT at saka ‘yung sa oil, tama lahat—tatamaan lahat, hindi yata ‘yon ‘yung hinahabol ng Saligang Batas na dapat progressive taxation,” he said.
The President cited that upon his assumption in office, he promised better tax collection so that there would be no need to introduce new taxes.
“Ngayon na-manage natin ‘yon (budget) deficit, pababa nang pababa itong deficit as a proportion or as a ratio to the gross domestic product that, in turn, was one of the factors na binigyan tayo ng investment grade status ng lahat nitong mga ratings agencies at patuloy na binibigyan tayo ng mga upgrades,” he said.
The Philippines got its first investment grade rating in March 2013 after Fitch Ratings elevated the economy to this status on back of improvement in domestic expansion, fiscal situation, resiliency of the banking system and continued strengthening of external payments position.
In May and December of the same year, Standard & Poor’s (S&P) and Moody’s Investment Service followed suit.
The following year, Fitch and Moody’s upped further their respective ratings on the country.
The only tax measure that the current Aquino administration pushed was the increase in Sin Taxes, which was signed into law in December 2013.
Aquino, however, pointed out that this measure aimed to address the rising number of Filipinos who were affected by smoking-related diseases and to provide additional funding for the government’s health-related programs.
Since its implementation in 2014 it has given the government additional Php 101.4 billion, which was allocated to the government’s universal health care program.
The President said cutting the rate of existing taxes but increasing VAT does not make any sense.
“E baka naman ito neto walang nangyari sa iyo, at ang tatamaan nga mas marami doon sa mas konti ang kakayahan,” he said.