Tax evaders ruling PH

0

Despite the filing of tax evasion charges against celebrities and high-profile individuals such as world boxing champion Manny Pacquiao, Zoren Legaspi, Renato Corona and Janet Lim-Napoles, the government has failed to increase its tax collection because there are so few people who are paying their tax dues in the first place.

Advertisements

Rep. Romero Quimbo of Marikina City (Metro Manila), chairman of the House Committee on Ways and Means, on Tuesday said government records show that 60 percent of professionals in the country do not pay taxes, while 70 percent of entrepreneurs are also not paying tax dues.

“We have 23 million individual learning individuals but only 5.6 million of them pay taxes. The rest are either exempted because they are minimum wage earners or they do not pay taxes at all. Those receiving salary every 15th and 30th of the month are the ones with 100 percent compliance, but then again, those with minimum wage who are exempted from paying also belong here. As such, only 18 percent of the working population are paying taxes,” Quimbo, one of the authors of the measure lowering individual and corporate income tax rates revising tax brackets, said.

This paltry tax base, he added, highlights the need to pass the measure lowering income and corporate tax rates and revising the tax collection system itself.

Under the pending measure, the country will have four income tax brackets.

This would mean that those earning P180,000 and below annually are exempted from paying taxes, while those who annually earn above P180,000 to P500,000 will pay nine percent.

Individuals whose yearly income is above P500,000 to P10 million will pay 17 percent, while those with more than P10 million annual income will have to pay 30 percent.
The rates are based on family and income expenditure survey, labor force survey and census.

“We will base it on gross income, regardless if you are a breadwinner, married, your number of children and the like. We want a system that is straightforward. The simpler the computation, the easier is the compliance. I am very confident that this measure will be supported in the committee and in the plenary,” Quimbo pointed out.

“There should be higher tax compliance for professionals and entrepreneurs. We can’t sleep on this. The income tax rates are stuck in 1997 levels, and that means that whether you are earning P500,000 and P50 million annually, you pay the same tax rate of 30 percent,” he said.

Because of the stagnant rates, Quimbo added, a soldier is paying 15 to 20 percent income tax when he or she is only supposed to pay five percent while a new teacher who earns P20,000 has to pay as much as 20 percent income tax rate.

A new teacher years back with a starting salary of P12,800 would only have to pay 10 percent income tax rate.

“This is simply not right because the purchasing power of P20,000 now is not the same as before. You won’t be able to buy much with that. Those being hit are high school principals and mid-level managers,” Quimbo said.

The Department of Finance has pegged projected government revenue loss out of the lowered income tax rates at P29 billion and is mulling on exempting those who earn less than P1 million annually from paying income taxes.

But there’s a catch–the Value Added Tax (VAT) will be raised to 14 percent.
Quimbo, a lawyer, expressed disgust over such proposal.

“That proposal is baseless. We don’t know where they got it. You want to help the middle class but you get back by putting the burden on the poor with VAT. That’s just plain lip service,” he said.

Share.
loading...
Loading...

Please follow our commenting guidelines.

Comments are closed.