Quezon lawmaker pushes bill to cut tax rates-A A +A
Tuesday, May 20, 2014
IN PREPARATION for the upcoming Asean integration in 2015, a measure seeking to reduce the income tax rate of individuals to 15 percent from the current 32 percent has been filed in the House of Representatives.
Quezon Province Representatives Angelina Tan said that for the country to fully benefit from the Asean Integration, the govenment needs to amend its current income tax schedules since it is expected that human capital would flow to where it could earn best.
She said that House Bill 4278 is consistent with the country's commitment to the Asean Economic Community (AEC) Blueprint, which seeks to transform Asean into a single market and production based by December 2015.
"The AECis guided by the following essential elements: free flow of goods; free flow of services; free flow of investments' free flow of capitals; and free flow of skilled labor," Tan said.
The lawmaker noted that among the 10-member countries of the Asean, the country has the highest tax rate at 32 percent after Thailand and Vietnam.
"In order to attract human capital and prevent the migration of our own skilled workforce, it is imperative to reduce the existing income tax rates while maintaining the progressivity of our income tax system," the lawmaker said.
She said her proposal would also help the country's workforce keep up with inflation and cope with the higher costs of living.
"Amidst higher inflation, which should be expected as a result of increase in food prices due to agricultural damage caused by typhoon Yolanda and higher demand for commodities on the back of relief operations, and increase in the Manila Electric Co. (Meralco) power rates, among other factors, no significant increase in wages had been made, thereby further reducing the purchasing power of our workers. Hence, reducing the country’s income tax rates for individuals will help our workforce keep up with inflation and cope with the higher costs of living," said Tan.
Last March, House Deputy Majority Leader Magtanggol Gunigundo (Valenzuela City, 2nd district), filed a similar measure to lower individual and corporate income tax rates.
Gunigundo said his proposal would reduce the number of Filipinos who do not pay taxes as lower taxes mean higher level of compliance.
He said the advantages of having 15 percent income tax rates are enormous, among them it will stimulate the economy by providing individual taxpayers more after tax income or disposable income which they can either save or spend in the engagement of services or purchase of goods that they are subject to Value-Added Tax (VAT).
The Senate version of the bills on tax rates has been filed by Senator Juan Edgardo Angara. (Sunnex)