Palace sticking with status quo, not proposing income tax cut

Communications Sec. Sonny Coloma. INQUIRER FILE PHOTO

Amid public clamor to simplify the country’s tax system to ease the burden of taxpayers, Malacañang on Saturday said the government will not lower income tax rates, but added that it will not also increase the mandatory 12 percent value-added tax (VAT) on goods and services.

Citing Bureau of Internal Revenue Commissioner Kim Henares, Communications Secretary Herminio “Sonny” Coloma said the government will not implement any change in tax rates as it focuses on improving tax collection.

“According to Commissioner Henares, government is not proposing higher VAT rates. We are for status quo,” Coloma said.

“No change in tax rates, and no new or higher taxes, and also no income tax cuts. Government will just focus on improving collection,” he added.

Meanwhile, Rep. Miro Quimbo, chairman of the House committee on ways and means, previously said his committee is set to approve a bill seeking to lower income tax rates in the country next week.

Quimbo said those who earn between P500,001 to P10 million annually will have a 17-percent tax rate, while those who earn more than P10 million will shoulder a 30-percent income tax.

READ: House panel set to approve bill lowering income tax rates

In an opinion column published in the Inquirer in April, Peter Wallace of the Wallace Business Forum also quoted Finance Secretary Cesar Purisima as suggesting that a possible reduction of income tax will be compensated by increasing VAT to 14 percent from 12 percent. Yuji Vincent Gonzales/IDL

READ: A tax revolution | Tax reform package seen to jack up VAT rate