Noy meets with lower income tax proponents

MANILA, Philippines - After voicing his aversion to lowering income taxes, President Aquino met last Thursday with the principal proponents of the measure – Marikina City Rep. Romero Federico Quimbo and Sen. Juan Edgardo Angara – to discuss their proposal and get more insights.

But deputy presidential spokesperson Abigail Valte said over radio dzRB there were no details on the outcome of the meeting.

Quimbo was earlier quoted as saying he would try to convince the President to support his House Bill No. 4829 and that he would present data justifying lower income taxes.

Quimbo heads the House committee on ways and means, while Angara is his counterpart in the Senate.

The President had said he was not in favor of lowering income taxes if it would mean imposing higher value added tax that would also raise prices of commodities and services.

The Department of Finance said it was open to the idea of tax reform but that it should be taken in a holistic approach – meaning a complete tax restructuring system should be set in place so that losses from lowering income taxes could be recovered through other measures.

The Palace has been saying taxes and revenues were the lifeblood of the nation and that lowering income taxes as a stand-alone measure would have serious repercussions on social services and on the economy as a whole.

The plan to rationalize tax rates has gained support from the Trade Union Congress of the Philippines as well as the Joint Foreign Chambers of the Philippines.

JFC said lowering income and corporate taxes is possible but the government would have to raise consumption taxes or excise tax on oil, for instance, to offset losses.

JFC stressed the country’s current income tax rates were set in 1997 with adjustments not made frequently enough to remedy a growing inequity, as more salaried workers were paying higher taxes as inflation moved them up to higher tax brackets.