Internal Revenue Commissioner Kim Henares. INQUIRER FILE PHOTO
MANILA, Philippines – The government thumbed down on Tuesday all proposed tax-exemption measures in the Senate, saying
this would cost the government P74 billion in revenue losses.
At the start of the hearing of the Senate committee on ways and means, Bureau of Internal Revenue Commissioner Kim Henares, who represented the Department of Finance, immediately informed the body that the executive would oppose any of the measures that would give tax exemptions.
“I’m going to play the bad guy in this committee hearing because my general policy is that as of now, we’re still on a deficit,” Henares told the committee being headed by Senator Juan Edgardo Angara.
“So if you look at it from an ordinary household, we’re still borrowing to live. If we look at prudence, you don’t give away funds unless as you are already up ahead a bit and then you are free to tighten up on certain things,” she said.
Among the measures the government was opposing was a bill that seeks to exclude 13th-month and overtime pay as well as performance-based bonus from the computation of taxable income and a bill proposing a P75,000 cap for income tax exemption of the 13th-month pay/Christmas bonus.
If all these bills are passed, Henares said, it would result in a total of P74-billion revenue loss.
“Of course we’re faced with the P130-billion thing so we’re in between rock and the deep blue sea,” she said, referring to the proposed budget for the reconstruction in areas hit by Supertyphoon “Yolanda.”
“In principle, that’s where we’re coming from and given how difficult it is to pass a revenue measure, for example, we took 15 years to pass the sin tax law to collect P33 billion. Whereas, I am looking at all the proposed bills, it’s P74 billion if all of it is passed. It seems it’s like a click of a finger…, but to get something in, we took 15 years,” she pointed out.
But Senate Pro Tempore Ralph Recto insisted on his propose measures, saying that the government will always be in a deficit and will always be borrowing.
“The idea is to spend the money wisely,” Recto said.
Despite the government’s objection, Angara said it would still be up to Congress whether or not to pass the proposed measures.
He cited as example the BIR and the DOF’s objections on the tax exemption on minimum wage earners as well as the increase on tax deductions but the measures were still passed by Congress.
“Hindi naman suportado nila yun pero pinasa pa rin natin. So nasa sa atin talaga yun,” Angara told reporters after the hearing.
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