THE leadership of the House of Representatives on Thursday rejected the Department of Finance (DOF)-proposed offsetting measures to recover the estimated P179 billion in revenues that will be lost due to the planned lowering of personal income-tax (PIT) rates.
Speaker Pantaleon D. Alvarez said instead of removing the value-added tax exemptions for senior citizens and persons with disabilities (PWDs), as well as imposing excise tax on petroleum, the finance department and its attached agencies should improve their tax-collection efficiency.
“Rest assured that the lower chamber will always be on the side of the people. We will not allow these kind of [antipoor] proposals here in the House of Representatives,” Alvarez said in an interview.
Alvarez added that he will set consultations with the Senate to discuss the DOF proposal.
“I am against making the senior citizens and PWD’s suffer. We will study the DOF measure very closely to make sure that it will be fair to all concerned,” he added.
House Committee on Ways and Means Chairman Dakila Carlo E. Cua of Quirino said there is no final decision yet whether the lower chamber will adopt the whole proposal of the DOF.
Aside from the DOF proposal, Cua said there are 25 bills filed at the lower chamber seeking to reduce the income tax imposed on individuals and corporations by amending the National Internal Revenue Code.
Alvarez also assured the public that his fellow lawmakers will not allow the lower chamber to be turned into a DOF rubber stamp.
“I noticed in the DOF proposal there’s no provision that will address the tax-collection efficiency [of the government’s revenue-generating agencies],” the Speaker added.
Alvarez also told the DOF to look into other revenue-generating measures that will not affect the poor, senior citizens and PWDs.
Earlier, Alvarez urged the DOF to strictly implement Republic Act 9335, or the lateral attrition law, which provides a system of reward and punishment for officials of the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR), depending on their performance.
The BOC and BIR are both under the DOF, now headed by Secretary Carlos G. Dominguez III.
“In the attrition law, there is a provision punishing them through removal from office for not hitting their target revenues,” Alvarez said. “[Because of this] we will activate the congressional oversight committee.”
According to Alvarez, the previous administration failed to implement the law, which provides for a system of reward and punishment for officials and employees of the BOC and BIR who meet and fail their target collections.
The attrition law, enacted during the term of then-President Gloria Macapagal-Arroyo, seeks to improve the revenue-collection performance of the BIR and BOC through the creation of a rewards and incentives fund and of a revenue performance-evaluation board.
The law said BIR and BOC officials and employees who fall short of their collection targets by at least 7.5 percent would be dismissed from service, while those who go beyond expectations would be given incentives.
Members of the Makabayan bloc also bucked the tax proposals of the DOF, highlighted by the restructuring of the PIT, VAT-coverage expansion, excise-tax hike on oil products and restructuring of excise tax on automobiles.
“The tax proposal of the finance department is far from benefiting the poor, while expanding VAT and excise tax hike on oil products are definitely detrimental,” Party-list Rep. Ariel Casilao of Anakpawis said in a news conference.
The lawmaker said restructuring the personal-income tax, particularly pegging the maximum P250,000 annual income for tax exemption, would not benefit the 55 percent of the country’s population based in the rural areas, the near 11 million unemployed and underemployed workers and the 4.7 million Filipino families below poverty line.
He added that the expansion of VAT coverage would certainly lead to higher consumer prices, which would affect the poor, while the increase in excise tax on oil products would trigger a cumulative effect, particularly on the prices of basic goods and services.
He said while some would benefit from the PIT restructuring, the effect of other provisions of the DOF proposal would affect the poor.
Party-list Rep. Carlos Isagani Zarate of Bayan Muna also questioned the basis of the DOF proposal of exempting only those with an annual salary of P250,000.
“Where did this figure come from? What is the basis for this? The amount of P250,000 is way below the annual family living wage of a Filipino that is now pegged at P396,390, or P1,086 daily,” Zarate said, citing the study of independent think tank Ibon Foundation.
“Under our proposal, House Bill 333, we used the amount P396,390 as the minimum figure of tax exemption because this is the basic living salary needed by a family,” Zarate added.
Zarate said some 17 million Filipino families, or 80 percent of all families, earn at most around P20,000 a month. The poorest half, or 53 percent, try to survive with less than P13,000 a month, and the poorest fifth at less than P5,600 a month.
“These poor and low-income families that should not be taxed at all. On the other hand, the country’s richest 326,000 families, or 1.5 percent of all families, earn an average of P106,000 to P191,000 a month,” Zarate added.
Senate receives copy of DOF bill
“Yes [we received the] DOF draft bill,” Sen. Juan Edgardo Angara said, confirming that Dominguez submitted late last week to the committee the 27-page DOF proposal.
In a letter to Angara accompanying a copy of the counterpart bill that Cua is sponsoring in the House of Representatives, Dominguez wrote: “We respectfully endorse the DOF bill, which embodies the fulfillment of the administration’s commitment to lower income-tax rates for wage earners and fund the 10-point socioeconomic agenda of the government.”
Senators sitting in the Ways and Means Committee are expected to convene public hearings on the DOF bill before crafting a committee report for plenary deliberation and approval by the Senate.
Angara admitted the committee has yet to fix a target date for the submission of the report endorsing early passage of the DOF bill.
“That depends on when the House of Representatives passes their version as required by the Constitution,” Angara explained, referring to Charter’s provision that all money measures must emanate from the House.
With Butch Fernandez