THE Philippine government stands to lose P75 billion in revenues in the event that congress passed the nine proposed measures seeking different types of tax relief, the Bureau of Internal Revenue (BIR) said Tuesday.
Commissioner Kim Heneres of the BIR, during the Senate ways and means committee hearing to discuss the different tax relief proposals referred to the panel, said that the tax bureau cannot support the proposals because the country is still on a deficit.
“I’m going to play the bad guy in this committee hearing. Because my general policy is that as of now, we’re still on a deficit. So if you look at it from an ordinary household, we’re still borrowing to live,” Henares told panel.
According to Henares the Finance department will be obliged to come up with new revenue measures in case the nine tax relief measures are enacted into law, because the government needs to replace the amount that will be lost as a result of the new tax exemptions
There are nine different measures pending before the senate committee on ways and means that seeks to provide tax relief and discounts to some sectors of the society in order to cope with high cost of living.
These are Senate bills 453 – Excluding overtime pay from the computation of taxable income; 256 – P75,000.00 cap for income tax exemption of the 13th month pay/Christmas bonus; 452 – Excluding 13th month pay from the computation of taxable income; 1838 – National Internal Revenue Code (Cap on the amount of thirteenth month pay and other benefits); 1213 – Excluding performance-based bonus from the computation of taxable income; 1356 – People’s Fund Act of 2013; 163- Additional Relief to Families Act of 2013; 257 – Family Care Act of 2013 and 1155 and 1905 – Tax deductions to parents and legal guardians of children with special needs.
On the proposed cap for income tax exemption of 13th month pay and Christmas bonus alone, Henares said that projected revenue loss will be at P43 billion and without a new revenue measure the government will not be able to retrieve the loss.
Senate president Pro-tempore Ralph Recto in filing the bill wants the exclusion raised to P75,000, explaining that the present ceiling was set by a law enacted almost 20 years ago.
The present laws exclude the mandated 13th Month Pay and the Christmas bonus from the coverage of income taxes, but only up to the extent of P30,000. Any amount in excess forms part of an individual’s gross income and therefore subject to the operation of the National Internal Revenue Code.
Recto said the said exemption will not be a loss to the government since by increasing the cap the measure will also increase the spending capacity of those covered by the bill which will bring additional taxes to the government.
Henares however made it clear that he is not against measure that would provide tax relief to taxpayers, however it should be done on the proper time or when the government has enough money to give away.
“I’m just saying the best scenario is if you give away something, you should have something to replace it with. But at the end of the day, the legislative body will have their own work. Then it goes through the process,” the tax chief pointed out.
Senator Juan Edgardo Angara, chair of the ways and means committee for his part said that he already expected the position of the finance department and the BIR to oppose the measures since their job is to make sure that revenue collection will not be affected.
Angara said that the committee will study all the proposals and would push for their passage if they found that the government would not suffer huge losses.
As for the position of the BIR against the proposed measures, Angara said that the DOF and the BIR have been known to object tax exemption measures but in the end the congress will be the one that would decide on the fate of the bills.
He cited the proposed tax exemption for minimum wage earners in 2008, which was enacted into law despite the objection of the finance and the tax departments.
“The committee will considered all aspects of the bills, but right now we want to find ways on how to provide relief to taxpayers who have been coping with the rising prices of commodities,” he added. Jefferson Antiporda