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Opinion on Tax Reform Bills

Philippine Taxation Law was set almost three decades ago in 1987.  Taxation being the primary source of the government’s revenues, there are three legislators who looked closely on it especially personal taxes - sees a need for Reform. The latest among is Senator Angara’s which had been the topic of discussions in the country today. The President and the BIR Commissioner were not in favor of the TAX CUT Angara has suggested. Comparing the Bills filed here is what I am seeing about it, being an ordinary citizen.

A Glimpse on Tax Reform Bills

SB 2149 2014 authored by Senator Juan Edgardo “ Sonny” Angara  

Angara supports the need for Tax Cut, he also explained that the expected shortage on collections for the Government’s Budge can be settled from other income sources. Angara advocated that the Government can collect twice as much from the revenues sourcing from the Bureau of Customs (BOC) and the Bureau of 

Internal Revenues plus the premiums obtained from Public and Private Partnerships(PPP) undertakings.  And the two Bureaus mentioned above can generate an income of around  1-1.5 T and IF the bill is approved,  ONLY 30 B from it shall be cut from the government’s income

His advocacy lies on the empowerment of Human Capital thru reduced levy so that our own would not think of migrating to neighboring countries where taxes are quite feasible to them since we are on the verge of economic integration with the Association of South East Asian Nations (ASEAN) community. More likely that job opportunities abroad will attract  our income tax payers to leave the country burdened by the taxes billed on them.

Sin Taxes (taxes on cigarettes and beer) can also be jacked-up (also to help people preserve their health) . A good example is greater taxes for three to four times car owners when buying their next luxury car – this has a domino effect on the economy affecting traffic conditions if they will be allowed leniently. Those are some of the options that will also provide  advantage to the economy and the citizens.

SB 1942 2013 authored by Senator  Paolo  Benigno “Bam” Aquino IV

Sen. Aquino suggested tax rate adjustment on a six-year interval according to Consumer Price Index (CPI) and  a tax exemption for earners of 60,000 below. Quite helpful for low-wage earnersJ

SB 716 filed 2013 filed by Senator Ralph Recto

The threshold shall be matched or adjusted with the prevailing Consumer Price Index (CPI) – that would probably explain the need for HIGHER adjustment on set taxing brackets as he said the prices of consumer commodities has almost doubled from 1998 to 2013. He has also cleared that earners in the 20,000 below range shall only be charged the lowest rate of 5%. The bill also suggests that rates be adjusted every six years interval based on CPI.

Why Pro-Tax Reform?

The salary of a fastfood service crew today can be somehow compared to the salary of the Store Managers way back in 1987 when the Taxation Law has been put on practice. I believe that his suggestion on adjustment basis is fairly acceptable for us and to our economy. I salute the Sen Recto for not just favoring what could possibly please the public alone but he is balancing his suggestions with respect to the economic situation.