Aquino not keen on cutting taxes
President Aquino is not in favor of lowering the income tax rates.
“The question is, will lowering the income tax rates benefit our countrymen?” Aquino said in Filipino. “I’m not convinced it would,” he told reporters in Iloilo City on Monday where he inaugurated the new convention center.
Instead, he said he favored the status quo, meaning the government would not lower income tax rates but would not raise the 12-percent value-added tax (VAT) on goods and services either.
Malacañang earlier said there would be “no change in tax rates and no new taxes but also no tax cuts. Government will just focus on improving collection.”
Aquino recalled that when he ran for President in 2010, he promised that “taxes will be collected assiduously.”
He noted that his administration had been “able to manage the budget deficit, which continues to go down as a proportion or as a ratio to the gross domestic product that, in turn, was one of the factors we’re given investment grade status by the rating agencies. We’re continuously given upgrades.”
“If we lower the income tax, revenues will go down, the deficit will grow,” he said in Filipino.
On a proposal to lower income tax rates but raise the VAT, the President said that would mean an increase in taxes paid by oil firms.
“If we raise oil taxes, all prices will rise—for transportation, electricity, etc., etc.,” he said, adding that “a hike in the VAT and in oil prices will affect everyone. And the ones who will be affected most are those that can afford it the least.”
Both Finance Secretary Cesar Purisima and Revenue Commissioner Kim Henares have opposed House Bill No. 4289, which seeks to lower income tax rates.—Jerry E. Esplanada
