Malacanang rejects House committee bill to lower income tax rates
Finance Sec. Cesar Purisima doesn't want the government to lose its current revenue.
(SPOT.ph) Malacañang has rejected the proposed bill by the House of Representatives that seeks to reduce income tax rates, reports said on September 3.
In a text message sent by Department of Finance (DOF) Sec. Cesar Purisima to Palace spokesperson Edwin Lacierda, he said that the government cannot risk losing the current revenue collected as it might shake the robust economy. “We urge Congress to approach fiscal reform from a holistic standpoint with the goal of making the structure more buoyant, equitable, progressive, and competitive,” said Purisima. Lacierda relayed the message to Palace reporters.
Lacierda also mentioned that according to the estimates of the Bureau of Internal Revenue (BIR), the government would lose around P29 billion in revenues if the bill is passed.
Bill author Marikina Rep. Miro Quimbo said that while the government can expect lower revenues, it can likewise expect better compliance among taxpayers. Based on government records, Quimbo revealed that “only 18% of the working population are paying taxes.”
Well, the DOF isn't against all kinds of tax reforms. Last month, the department proposed that the Value Added Tax (VAT) be raised by 2% and expanded by removing tax exemptions, but the proposal was slammed immediately by House leaders.