Finance agencies won’t back tax cuts
It’s “disgraceful” how government finance agencies are asking for huge increases in their 2016 budget, but are reluctant to support income tax reform measures that would give a little relief to taxpayers, Sen. Sonny Angara said on Tuesday.
Senators on Tuesday continued to press for adjustments in the income tax brackets, a move that finance officials and even President Aquino are opposed to on the grounds it would increase the deficit and lower the country’s credit rating.
Angara and Senate President pro tem Ralph Recto both said Aquino may have been misinformed about the effect of the tax reform bills on the economy, which they said would not be dire, and hoped the President could still be convinced to support income tax cuts.
As for a projected P30-billion loss in government revenue should the income tax reform bills pass, they said this could be addressed by removing non-urgent funding for certain government offices, such as the proposed P30-billion subsidy to the Development Bank of the Philippines and the Land Bank of the Philippines to increase their capitalization in 2016.
The subsidy is included in the P50.34-billion budget of the Department of Finance for 2016.
Aside from the P30-billion subsidy to the DBP and Land Bank, the allocation would go to the construction of new finance offices.
“I think it’s disgraceful. You’re depriving people who don’t earn a lot. But yet you want the government to have new offices. People are struggling to make ends meet and we are spending the government’s money like it’s our own personal money,” Angara told reporters following the hearing on the DOF budget.
Angara has authored a bill seeking to lower income tax rates for wage earners, which are the highest in the Asean region. A similar measure is pending in the House of Representatives.
Finance officials defended the construction of new offices, saying the projects had long been pending. The offices would be built on donated land, which means the government would not be spending as much.
