Second of three parts
THE lack of legislative sessions in what’s left of the 16th Congress already killed the proposals lowering individual and corporate income-tax rates, according to Speaker Feliciano Belmonte Jr.
This is despite the strong lobbying from business chambers and labor groups.
While admitting that the government needs to tweak the income-tax regime to increase the take-home pay of ordinary workers, Belmonte said the lower chamber no longer has the time to pass the tax-reform measure, especially now that lawmakers are focusing on the upcoming 2016 national elections. Under the law, all tax measures must emanate from the House.
Add to this the biggest stumbling block to the passage of the income-tax reform bill—the strong position of the Palace. With this, Belmonte said it is now up to the next administration to find solutions on how to increase the take-home pay of Filipino workers.
“Personally, I could have wanted discussions on it, more in-depth study. Let’s get momentum in its favor and then make it one of the first priorities of the next administration. Let them reap the reward of this,” he said.
No tax cut
On September 14 Malacañang, taking the cue from the Department of Finance (DOF), already rejected the passage in Congress of a long-pending bill mandating adjustments in individual and corporate income-tax rates, saying the government “cannot put our fiscal sustainability and credit rating at risk by doing piecemeal revenue-reducing legislation.”
The DOF has warned lawmakers that reducing the individual income- and corporate-tax rates may cause the government to lose revenues totaling as much as 1.5 percent of the country’s GDP, or P30 billion.
But amid strong calls to pass the tax-reform measure, House Committee on Ways and Means Chairman and Liberal Party (LP) Rep. Romero S. Quimbo of Marikina and Senate Committee on Ways and Means Chairman Sen. Juan Edgardo Angara said the DOF is currently reconsidering the tax-reform proposals as instructed by the President during their meeting on September 24.
According to Angara, he and Quimbo presented before President Aquino “various arguments and reasons for tax reform, from the level of individual households at the micro level and the benefits to society and the economy at large.”
But last week Mr. Aquino, himself, rejected anew the proposal slashing income- and corporate-tax rates.
Under the lower chamber’s version of the bill, individuals earning below P180,000 annually will be exempted from paying income tax. In the current setup, those earning P10,000 or less per month pay 5-percent income tax.
The bill also reduces the income-tax rate of those earning above P180,000 to 5 percent. The highest rate at 30 percent will be paid by those earning P1.1 million annually, he said.
Currently those with yearly earnings of P500,000 and above pay 32-percent income tax.
The country’s current individual income-tax brackets remained unchanged since 1997.
However, Senior Deputy Minority Leader and Party-list Rep. Silvestre “Bebot” Bello III of 1-BAP and Independent Minority Bloc Leader and Lakas Rep. Martin Romualdez of Leyte said the leadership of the House of Representatives should still pass the proposal to pressure President Aquino into signing it into law.
“[Chairman of the House Committee on Ways and Means] Miro [Quimbo of Marikina] should pass it first at the committee level and the House and Senate leadership [on final reading] and after that let P-Noy face his bosses,” Bello said.
Romualdez also urged his fellow lawmakers to support the measure so as to pressure the Palace to change its position in support of the measure. “We would definitely want this measure to get passed as this stands to benefit millions of Filipino workers,” Romualdez, a lawyer, said.
But given the remaining session days of the Congress and the position of the Palace, Quimbo said only the proposal adjusting the levels of taxable income to inflation is viable.
Quimbo, citing government data, said the P500,000 income bracket, currently taxable by 32 percent, needs to be adjusted, considering that this amounts to P1.2 million today.
Belmonte and Drilon are set to convince Mr. Aquino to at least accept the proposal adjusting the levels of taxable income to inflation, after the Palace repeatedly rejected anew the proposal lowering income- and corporate-tax rates.
“We [Senate President Franklin Drilon and I] will still convince President Aquino [at least] on the proposal adjusting levels of taxable income to inflation,” he said.
Dynasties remain
Also considered as a “dead bill” this Congress is the antidynasty bill. Belmonte, in a recent news conference, said the measure—approved in the committee chaired by Capiz Rep. Fredenil Castro—was never recommended for plenary debates.
The committee-approved version allows only two members of the second degree of consanguinity and affinity of the family to run in one place. It, however, allows the relatives affected to run in other places.
“We have mixed opinions on the number of members who will be allowed to run,” Belmonte said. “We have complied with our obligation under the Constitution, which prescribes anti-dynasty as may be provided by law. But I do not want to support any antidynasty law which has full of holes,” Belmonte said.
Under the Constitution the state shall guarantee equal access to opportunities for public service and prohibit political dynasties as may be defined by law.
The author of the antidynasty bill, LP Rep. Egay Erice of Caloocan, said a measure against political dynasties should be passed, as there is a strong link between poverty and the extended dominance of political families. Erice said nine of the 10 poorest provinces were either ruled or are still being ruled by political dynasties.
Erice, citing a 2012 survey of the National Statistical Coordination Board, said the top 10 poorest provinces are: Lanao del Sur, Apayao, Eastern Samar, Maguindanao, Zamboanga del Norte, Davao Oriental, Ifugao, Sarangani, Negros Oriental and Masbate.
He said the survey showed that these provinces have the highest percentage of families who failed to meet the minimum monthly income of P7,820 in the first quarter of 2012. “One could hardly argue that this then is merely coincidental,” Erice said.
The lawmaker added: “Instead of focusing on how to better serve the public, oftentimes, these political dynasties are more preoccupied on crafting ways on how to make their government positions profitable businesses or milking cows.”
“And since there is no proper check and balance because the people who were supposed to do that are related to them, these political dynasties were able to get away with stealing the money of the people,” he added.
“Let us pass this antipolitical dynasty bill and let our sons and daughters and the next generation see and remember how we have been instrumental in redirecting the path of our country. That would be our legacy, not a dynasty,” Erice said.
To be continued