TAGUM CITY—A Manila-based organization urging reform in the country’s tax system has brought its campaign online to press amendment to what it called archaic tax law which it claimed to “overtax” middle class workers.
The online petition “Lower Income Taxes” at Change.org is petitioning both the House of Representatives and Senate “to revise tax laws to make them uniform, equitable and progressive.”
Created by Tax Reform Philippines, it said “the current income tax brackets, barely revised since 1977 has made middle class Filipinos pay one of the highest income taxes in Asia.”
“We strongly urge the government to revise these [tax] brackets to fulfill the constitutional mandate that the rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation,” the group said.
As of Wednesday, the petition already got 1,938 entries from netizens.
Workers in this city also showed their support, saying it will be beneficial to workers.
Angel Cursinto, 31, said that lowering the tax is very important, adding “that government should not overtax the workers and tax reforms must be implemented to ease the economic burden of the people. If this will be approved, this will benefit workers who have meager income.”
Cursinto, who considers herself a “marginalized” earner, said “government must reduce the tax since our taxes were only pocketed by those in the government.”
Cruise ship worker Jason Suerza, 37, said government is “robbing” also Filipino OFWs because of “poor tax administration and corruption in the government.”
He said that poor tax administration is seen in “transnational corporations and business conglomerates that are reportedly remiss in paying their taxes to the government.”
“Is it fair? Is it just? Is it pro-poor? Is it pro-Filipino? Definitely not! Our government is only good in targeting marginalized workers and extracting an amount from a meager income that could even hardly feed a family,” Suerza said.
On Wednesday, the Tax Management Association of the Philippines (TMAP) has filed a position paper before the Ways and Means Committee in the House of Representative to push for an “adjusted tax brackets and reduced tax rates.”
In an emailed statement, TMAP President Rina Reyes Manuel said “it’s high time to lower the tax bracket to make it equitable.Corporations are only subjected to 30 percent tax rate while individuals are taxed 32 percent.”
Manuel pointed out that “corporations enjoy several deductions and perks while employees only have personal exemptions, like those with the children. Obviously, based on the present setting workers are overtaxed by the government.”
“We support the adjustment of income tax brackets to consider the current Consumer Price Index (CPI) because the adjustment will increase disposable income, improve the living standards of our countrymen and fuel the economy,” TMAP said.
TMAP said that it recommend that “income tax brackets should provide for a 0% tax rate at the level of those defined as marginal income earners which may also be aligned with the level of minimum wage earners. Currently, even an annual P10,000 taxable income is taxed at 5%.”
A comparison of the individual tax rates prevailing with Asean neighbors shows that the Philippine taxation of incomes in excess of P500,000, taxed at 32%, is the highest in the region..
In the TMAPS position paper, a worker earning an equivalent P500,000 in Singapore pays only 2% income tax.
Manuel said TMAP is backing proposals seeking the reduction of income tax rates as well as the adjustment of tax brackets to reflect the rising costs of goods.
Meanwhile, ACT Party-list Representative Cong. Antonio Tinio filed House Bill 247 or an Act Increasing The Allowance Of Personal Exemption For Individual Taxpayers, Amending For The Purpose Section 35 (A) And (B) Of Republic Act 8424, Or The Tax Reform Act Of 1997, As Amended By Republic Act 9504.
In the bill’s exploratory note, he explained that HB 247 “aims to increase the basic and additional exemptions and to give the Commissioner of Internal Revenue the duty to annually review these exemptions in relation to current living costs and recommend necessary adjustments to Congress.”
“It proposes the restoration of the exemptions to the 2008 levels, thereby easing the income tax burden on ordinary working people. This proposal will allow the lowest-paid government employee to take home a non-taxable income of at least 69% of his or her annual pay. The middle-level government employee and the minimum wage earner will be assured of 34% and 53% of their income.” Tinio said. (davaotoday.com)