Malacañang on Wednesday rejected calls by foreign businessmen to lower the country’s income tax rates, reiterating that it favored the status quo.
This means the government will not lower income taxes but will not raise the 12-percent value-added tax (VAT) on goods and services either.
Presidential Communications Secretary Herminio Coloma said President Aquino “prefers to stay the course for the remainder of his term in order to preserve and consolidate the gains achieved through sound management of macroeconomic fundamentals.”
For his part, presidential spokesman Edwin Lacierda said “what the administration is batting for is a comprehensive discussion on the tax system.”
Tax reforms
“So we are looking not just at the income tax system, but we are looking at the entire comprehensive taxation reform that we want to happen,” he told reporters.
In a statement, the Joint Foreign Chambers (JFC) pressed the government to reduce income taxes.
The JFC, which groups the American, European, Japanese, Korean, Canadian and Australia-New Zealand chambers of commerce, as well as the Philippine Association of Multinational Companies Regional Headquarters, also called for the raising of taxes on consumption, saying it was necessary to maintain enhanced public sector revenue inflows.
“There clearly is a pattern to reduce corporate and individual income tax rates in competing Association of Southeast Asian Nations economies to make their countries more competitive. The Philippines should not fall behind the regional trend,” it said.
Asean taxes
According to the JFC, the Philippines imposes the second-highest personal income tax and the highest corporate income tax among six of the 10 Asean member-countries.
The personal and corporate income taxes in the country currently stand at 32 percent and 30 percent, respectively.