Escudero urges Aquino to back bill lowering income tax rates | Inquirer News

Escudero urges Aquino to back bill lowering income tax rates

By: - Reporter / @MAgerINQ
/ 01:39 PM August 25, 2015

Senator Francis "Chiz" Escudero. INQUIRER FILE PHOTO

Senator Francis “Chiz” Escudero. INQUIRER FILE PHOTO

Senator Francis “Chiz” Escudero urged President Benigno Aquino III on Tuesday to send to Congress a legislation lowering personal income taxes or simply certify as urgent one of the pending proposals seeking to reduce the income tax rates.

Escudero, who used to chair the Senate committee on finance, said a “presidential certification will make the bill a priority measure and veto-proof.”


READ: Aquino urged to lower individual income taxes as ‘best goodbye gift’ | Aquino favors lower income tax rates


“The reality is that the input of the President is critical when it comes to tax measures. The lawmaking process stops at his desk. If he doesn’t like a bill, he won’t sign it. So if this is the reality, then it’s better to engage him,” he said in a statement.

But Escudero said that historically, measures which presidents send to Congress, are not always written in stone.

“Congress can fine-tune, improve and make it better. But at the very least, legislators would know the sense of the Office of the President. It can serve as an input, and a major one at that,” he said.

“Katulad nitong sa BBL, hindi naman parang rubber stamp ang Congress sa pagpasa nito. Ganyan din ang mangyayari sa mga panukalang magpapababa ng personal income tax rates. Titingnan bilang gabay ang gusto ng Palasyo, and with this as basis, pagbubutihin ng Kongreso,” he added, referring to the controversial Bangsamoro Basic Law.

(Like this BBL, Congress was not like a rubber stamp in passing this. This is what will happen in other measures that seek to lower personal income tax rates. We’ll look at it at something that the Palace wants and with this as basis, Congress will make it better)

Escudero said that more than the specifics of the bill, “what is important is the President’s message to Congress that ‘I want this measure passed.”


“President Aquino should not let the opportunity pass to bring down one of region’s highest individual income tax rates,” he said.

“Years from now, when the President goes back to Times Street, he should not look back with regret that he squandered the opportunity to lower the income taxes to their compassionate levels.”

The senator pointed out that the country’s 32 percent tax bite on a monthly income of $1,100 (P51,491 at P46.81 exchange) is one of the highest in the region.

“And whatever left in the pay envelope when spent is subject to a 12-percent VAT,” said Escudero, who also shot down proposals to increase the 12 percent VAT rate to recoup whatever foregone revenues lower income taxes would cause.

“The VAT itself can capture the expenditure of a higher take-home pay. There is no need to increase the sales tax to offset any change in revenue collection resulting from the lowering of personal income taxes. It’s no longer relief if what is deducted is soon recovered by a higher VAT,” he further said.

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Escudero was the sponsor of a measure that exempts minimum wage earners in the private and public sectors from income tax, which later became Republic Act No. 9504. The law covers not only the basic pay, but also holiday pay, overtime pay, night shift differential and hazard pay received by minimum wage earners. IDL

TAGS: bill, Congress, Legislation, Senate, tax rates

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