Vice President Jejomar Binay. INQUIRER PHOTO / ELOISA LOPEZ
PALOMPON, Leyte — Vice President Jejomar Binay on Wednesday said he is angry at the Bureau of Internal Revenue (BIR) for opposing his move to scrap the 32 percent income tax for middle and lower income tax earners of P30,000 and below.
In his speech before barangay captains at the Palompon town hall, Binay reiterated his call to scrap the income tax for earners of P30,000 and below per month in a bid to increase their salaries.
He said taxpayers face a double whammy of taxation because not only do they pay a high income tax rate, they also pay the value-added tax (VAT) on purchased goods.
“Kayong mga swelduhan, kawawa kayo. Tatlumpu’t dalawang porsyento halos ng kinikita niyo napupunta sa buwis. Ang isang bahagi yung binabayaran nyo in cash, ang tawag dun direct taxation. Bukod sa direct taxation, tuwing bumibili kayo, nagbabayad kayo ng VAT. Kaya dalawng beses kayong tinatamaan ng tax,” Binay said.
READ: Binay’s tax reform plan: Higher tax for the rich, lower tax for workers
He said by removing income tax, he would be able to increase the salaries of middle income earners by P3,000.
“‘Yung P30,000 na yun, kung aalisin ang income tax eh tataas kayo ng mga P3,000 pa. So halos ang kikitain niyo, P33,000,” Binay said.
He said the additional income would also result in higher collection of taxes because of increased consumption.
He lamented that the Philippines has one of the highest income tax in Asia, pegged at 32 percent for P30,000 and below income earners.
That’s why Binay said he is angry at BIR commissioner Kim Henares for opposing his proposal, adding that the administration is flip-flopping on its position in lowering income tax.
READ: Binay vows to sack Henares as soon as he becomes president
The Aquino administration initially considered income tax reform, but decided to go against it upon the stiff opposition of finance officials like Henares and Finance Secretary Cesar Purisima.
“Kaya nga naiinis ako. Ngayon, nagsalita si Kim Henares. Hindi ko naman malaman ba’t si Kim Henares nagsalita eh this is a decision of the president. Sa bagay… flip-flopping sila. Yung una, minungkahing alisin ang income tax, ayaw. Susunod, gusto. Susunod, ayaw,” Binay said.
Binay made the statement about Henares after the tax chief in an interview with ANC said lowering income tax is not the only solution to poverty inequality.
Henares proposed amending the law that allows the wealthy to get away with paying 10 percent tax while the middle and lower income earners were left with no choice but to pay 32 percent tax.
“Equity cannot be addressed by mere lowering of tax rates… Hindi pwede na yung piso ng isang mayaman e ang buwis lang ay 10 percent, e yung buwis ng isang middle class o mahirap ay 32. Bakit yung kabila 10, e kasi maraming ano sa batas e, so dapat ‘yun ‘yung ia-address,” Henares said.
In a statement on Wednesday, Binay directly addressed Henares and called her “anti-poor” for opposing his proposal to scrap income tax for middle income earners.
READ: VP Binay calls Henares ‘anti-poor’ for rejecting his proposal for tax reform
“To Ms. Henares, the solution is not more taxes. What the people need is tax relief, more jobs, more education, more healthcare, better government. There are 26 million poor Filipinos today. This administration has overseen an increase in poverty,” Binay said.
“As usual, this administration has once again shown that it prefers to punish the poor rather than uplift their lives. When I am president, there will be a tax cut within my first year in office,” Binay added.
INQUIRER.net has reached out to Henares for her comment.
Binay had proposed the following compensatory measures to plug in the massive P30 billion revenue hole to be brought about by scrapping the 32 percent income tax: the sale of government assets and the privatization of a number of government-owned and -controlled corporations (GOCCs); approval of revenue-generating measures, including Fiscal Incentives Rationalization; fuel marking to fight oil smuggling; and continued improvement in tax administration and collection efficiency.
The Binay camp also said the estimated P30 billion loss from exempting the lower income earners from taxes would be offset by cracking down on smuggling which cheats government hundreds of billions a year.
Binay said at least P230 billion per year are lost from agricultural products smuggling, P30 billion from oil smuggling, and P12 billion from tobacco smuggling. JE