Press Release
August 12, 2015


Senator Sonny Angara has pushed for tax reforms before the Aquino administration's economic managers during Wednesday's budget briefing in a bid to improve the lives of the Filipino people.

"'Di ba ho boss natin ang taumbayan pero bakit lahat ng mga tinutulak natin na reporma ay para yumaman ang gobyerno? 'Di ba dapat ang layunin natin ay para yumaman ang Pilipino? Hindi ba dapat iyon ang tahakin ng daang matuwid?" said Angara at the briefing on the 2016 National Expenditure Program by the Development Budget Coordination Committee.

"I acknowledge the various achievements made by the government in terms of inflation and debt management, and increased confidence among investors. But now that the Aquino administration is about to end, I was hoping for a more definitive statement that would directly impact o benefit the lives of every Juan dela Cruz. I don't see it, unfortunately. Can I ask what is preventing us?" the chairman of the ways and means committee added.

At 32 percent, the Philippines has the second-highest individual income tax rate in Southeast Asia, next to Thailand and Vietnam's 35 percent.

Currently, the income tax is the highest deduction in the salary of an average Filipino worker.

Moreover, the country's current individual income tax bracket has remained unchanged since 1997 amid rising inflation.

With the enactment of bills calling for tax reforms especially the lowering of income tax rates and the adjustment of brackets, its immediate impact would be higher take home pay for Filipino workers in the public and private sectors.

"Kitang-kita po natin na may pera ang gobyerno given the P580-billion in fiscal space. Hindi ko po maintindihan 'yung sagot na hindi natin kayang i-reporma ang ating tax system especially as we enter the period of ASEAN integration," Angara asked.

To which Finance Secretary Cesar Purisima responded, "The tax structure is something that we continue to review with the objective that it is progressive, equitable and one that puts us in a competitive position."

The DOF chief said that instead of piecemeal amendments, the government is looking into a more comprehensive tax reform to avoid "putting the fiscal health of the country at risk."

Among the reforms Purisima was pushing to fight tax evasion is the lifting of the bank secrecy law and the inclusion of tax evasion as a predicate crime under the Anti-Money Laundering Act.

"We support the proposal of Sen. Angara but on the other hand, there must be adjustment in some of the structural issues. We really believe that as we enter ASEAN integration, we have to have tax rates that are comparable to our neighbors," Purisima said.

Angara said he is confident that President Aquino would "see the wisdom" in the tax reform bills and move for their enactment as his "best goodbye gift to the Filipino people when he steps down from office" next year. Already, Angara has worked for the enactment of Republic Act 10653 that increased the tax exemption of the 13th month pay and other bonuses to P82,000 from P30,000, enabling at least 500,000 employees in the public and private sectors to get much bigger bonuses this year.

Angara hopes more workers would take home higher pays, not just in terms of bonuses, but also every month of the year with reduced, if not eliminated, deductions for income tax.

"We need to update our tax system for social justice and equity. We must build our working and middle class, ensure upward mobility, and enable them to comfortably provide for their families and their future," Angara said.

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