MANILA, Apr. 21 (PNA) — Markina City Rep. Miro Quimbo on Tuesday said that the target approval date of the measure lowering individual income tax rate has been moved to December.
During the weekly forum, Ugnayan sa Batasan News Forum, House committee on Ways and Means Chairman Quimbo said that the measure on income tax reforms is likely to be approved by the end of the year–six months late for the lower chamber’s June 11 target approval.
Quimbo said the panel has decided to prioritize and approve first the passage of other revenue-generating measures such as bills raising excise tax on oil, the fiscal incentives rationalization bill and the proposed Tax Incentives Management Act (TIMTA).
The fiscal incentives rationalization bill and the TIMTA have met strong opposition from other government promotion agencies and the private sector, saying the measures will “hurt” the country’s competitiveness.
“We will not pass the bill seeking to lower the individual income tax rates without approving first the TIMTA, fiscal incentives rationalization bill and excise tax on oil,” Quimbo pointed out.
But the passage of these three measures he said has been delayed because of the Mamasapano incident as the lower chamber was focusing on the incident.
“However, we will pass it in late 2015,” the veteran solon assured the public.
Currently, the technical working group (TWG) is still in the process of consolidating the 13 bills seeking to lower income tax rates.
Quimbo’s House Bill 4829 is also among the 13 pending bills, which seek to restructure the income taxes imposed on individuals.
House Bill 4829 is seeking for the revision of income taxes for compensation income earners, self-employed and professionals, and corporations through simplification of tiers and rates, and indexation to inflation.
During the hearing, some members of the panel said the Department of Finance is always trying to block the passage of this bill in the lower chamber, following the passage of the new law raising to Php82,000 from Php30,000 the tax cap for bonuses.
The Department of Finance, earlier, warned that raising the tax exemption cap on bonuses would result in revenue loss to the government of about Php30 billion per year. But other experts said that any revenue loss would be just Php3 billion.
Moreover, Quimbo admitted that the government stands to lose Php100 billion should Congress gives in to the measure on income tax reforms.
Currently, an employee, who has an annual taxable income of as low as Php10,000 and less, is already paying a 5-percent tax, which goes up to a high of 32 percent for those earning Php500,000 and above.
Deputy Majority Leader and Valenzuela City Rep. Magtanggol Gunigundo who is one of the principal authors of the measure, asked the House leadership to give the measure a chance.
Gunigundo filed House Bill 4099 seeking to lower individual and corporate income tax rates to 15 percent from the current 32 percent and 30 percent, respectively.
He said his proposal, if enacted into law, will definitely reduce the number of Filipinos who do not pay taxes as lower taxes mean higher level of compliance.
According to the veteran lawmaker, 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. (PNA)