MALACAÑANG should do more than lip service if it is really sincere in supporting the proposed legislation seeking to reduce income tax rates across-the-board, Senator Sonny Angara said Thursday.
Speaking during the weekly Kapihan sa Senado news forum, Angara said while he welcomes Malacañang’s pronouncement expressing openness in the proposals to lower the existing income tax rates, it still needs to show concrete actions.
Communications Secretary Herminio Coloma Jr. in a statement Wednesday said the Department of Finance (DOF) is supporting a comprehensive review of the existing taxation system, however, he is not sure if the proposed bill reducing income tax rates pending in congress is among the priority measures of President Benigno Aquino.
Angara, who chairs the Senate ways and means committee, said Malacañang’s latest expression of support on proposed tax measure, is not new. In fact, the executive issued a similar statement more than a year ago.
“It is like they (Malacañang) are just doing lip service to make it appear that they are supportive of the measure but they are not doing anything to really push for it,” Angara said.
According to the senator, the DOF can submit its proposal on the income tax reduction to congress.
There are several proposed measures currently pending in the Senate, however, Angara said, they cannot move forward unless the House of Representatives pass and transmit its approved version as stated under the origination clause in the constitution.
Under the law all proposed budget, revenue and tariff measures must originate from the House of Representatives. While the senate committees on finance or the ways and means can conduct hearings on proposed taxation measures, it cannot finalize the committee report without the approved version of the lower house.
Angara authored Senate bill 2149 that seeks to compress the net taxable income brackets, and lower tax rates especially for low- and middle-income earners.
The Philippines has the second highest individual income tax rate in the Southeast Asia region at 32 percent next to Thailand and Vietnam’s 35 percent, and the highest value added tax (VAT) at 12 percent.
Angara further noted that the country’s current individual income tax bracket has remained unchanged since 1997, even when the consumer price index has almost doubled.
Angara said that political personalities planning to run for higher office, especially those who are not doing well in surveys should take a stand on the taxation issue because it would have an effect to at least five million taxpayers.
“Actually I don’t understand why some candidates have not taken a position on this issue. Clearly this is an issue that resonates with the public,” he said.
Angara said among the presidentiables and vice presidentiables only Senator Francis Escudero and Davao City Mayor Rodrigo Duterte have taken a position on the tax reform issue.
“The reality is that the input of the President is critical when it comes to tax measures. The lawmaking process stops at his desk. If he doesn’t like a bill, he won’t sign it. So if this is the reality, then it’s better to engage him,” Escudero earlier said.
Duterte, on the other hand, said those earning below P25,000 should not be taxed by the government.
“We issue that challenge to the candidates for 2016 to take a position on this issue of tax reform because this is one that affects at least five million taxpayers,” Angara added.