Angara renews call to cut low-salaried employees’ tax

After President Benigno Aquino failed to touch on the tax reform agenda in his last State of the Nation Address (Sona), a senator is renewing his call to pass measures seeking to slash the tax rates of Filipino employees.

Senator Juan Edgardo “Sonny” Angara urged Aquino to mobilize Congress to pass the bills amending the taxation of millions of low-salaried employees.

“Sa akin pa rin, huwag nating isara ang pintuan sana. Nananawagan tayo sa executive sa branch, sa ating Pangulo na huwag isara ang pintuang iyon (Let’s not close the door. I call on the executive branch, our President not to close the door”),” Angara, chairman of the Senate ways and means committee, told Inquirer.net.

Days before the President’s last Sona, Angara, who is the author of the bill lowering tax rates for low- and middle-income earners, urged the Chief Executive to commit to the enactment of tax reforms, saying it would be his “best goodbye gift” to his “bosses.”

“Of the thousands of words in his Sona, one of the most awaited and the one which will be most applauded is the President saying that he will back bills that will lower individual income taxes,” Angara said in a statement.

But Angara did not hear the supposed loudest applause as Aquino made no mention of his backing for the tax reform in his more than two-hour-long speech before the lawmakers.

Aquino touted his administration’s flagship poverty alleviation program, the Pantawid Pamilyang Pilipino Program (4Ps), but made no promises for the working class especially the lowering of individual taxes.

“Naintindihan naman natin na maraming suliranin ang ating bansa. Hindi talaga maipagkasya sa isang speech, kahit one of the longest Sonas at  two hours plus [ang lahat issue],”Angara reacted.

‘Social Justice’

Angara, who has been pushing for tax reforms in the Senate since 2014, said it is the masses that will greatly benefit in the program.

“We need to do it for social justice dahil maiiwan na tayo. How can we build a middle class kung talagang ang hirap umangat ng mga trabahador natin. Wala silang maipon para sa kanilang mga pamilya, para sa kanilang edukasyaon, para sa kanilang kinabukasan,” Angara said.

(“We need to do it for social because we will be left behind. How can we build a middle class if it’s hard for our workers to level up [economically]. They don’t have savings for their families, for their education and for their future.”)

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

“A fresh graduate taking on an entry-level position at a call center center or BPO would already be taxed the third-highest rate at 25%. It’s like asking an average person to weightlift a sumo wrestler,” Angara said in a photoquote on his official Facebook page.

Angara’s proposal found backing in both the Upper and the Lower House, but according to the neophyte senator there “is an embargo in serious discussion for lower tax rates.”

“[N]apag-aralan na ‘yan ng dalawang committee on ways and means ng dalawang kamara. Both the lower house and the senate has studied it well and talagang ang conclusion namin is kailangang i-reporma natin ang ating tax system,” Angara said.

In February 2015, Aquino signed into law a measure that would raise the tax cap for the 13th-month pay and other benefits of employees earning from P 30,000 to P 82,000 after the Senate approved it on third and final reading.

Asked on the target date of passage of the measure, the senator said, “Hindi ko alam. Mahirap mag-sabi. Pero tayo we are doing our job. Kasi sa Senate hindi namin mailabas yung aming committee report unless ipasa sa house. That’s a requirement of the Constitution.”

(I don’t know. It’s hard to tell. But we are doing our job. We cannot release our committee report in the Senate unless the House passes the bill. That’s a requirement of the Constitution.)

“Nananawagan kami sa tao na sana they lobby their congressmen. Sana ipasa na ng House para ipasa na ng Senado (We call on to people to lobby their congressmen. I hope the House would pass so the Senate would follow).” he added.

VAT exemption for PWD

Speaking in front of at least 500 PWDs, educators and advocates, Angara vowed to push Senate bill 2483 amending the Magna Carta for Persons with Disability to legalize the PWD’s exemption to value added tax (TAX).

“We have a VAT exemption for PWDs. The good news is it’s been signed by majority of the members of my committee, the Senate committee on ways and means,” Angara told the PWDs.

“We’re talking about taxes. The 20 percent VAT exemption will go a long way. A lot of people are saying, sir you better pass that bill. We are paying so many thousands of pesos a month for our medicines, for our kids, for our dependents.

“Our laws for PWDs, it’s really a work in progress. There’s still much that needs to be done,” Angara said.