Bill cutting income tax held hostage by tax reform package

The passage of a proposed law lowering personal income tax rates has been “held hostage” by the government’s tax reform package, House of Representatives Deputy Speaker Miro Quimbo said on Thursday.

Quimbo urged Congress to prioritize the Personal Income Tax Reform Bill, which has been held back by the contentious Comprehensive Tax Reform Package by the Department of Finance (DOF).

“What started out as our clamor for immediate income tax relief for the salary worker has been sidetracked and waylaid by the DOF’s push for the imposition of massive and substantial new taxes solely for the purpose of raising more revenue,” the Marikina representative said in a statement.

Quimbo likened the legislative wrangling over tax reforms to a hostage situation.

“What is happening now is that the personal income tax reform we have been asking for is being held hostage by the DOF who has promised to ‘release’ it only if Congress gives a ransom in the form of additional excise taxes on fuel and other additional new taxes,” Quimbo said.

Quimbo is the author of House Bill No. 20, which proposes the adjustment of tax brackets to inflation based on the Consumer Price Index.

Though he did not disagree to the idea of imposing excise taxes on gasoline or even new taxes, the lawmaker said a more exhaustive study should be undertaken to ensure that the poor would not be the ones hit by the new taxes.

He called for more consultations with affected sectors whose tax privileges would be withdrawn, including business process outsourcing (BPO) companies, cooperatives, socialized housing, and the automobile industry.

“Let us not rush the imposition of these new taxes, some of which we have already seen as failures in the Philippine setting today,” Quimbo said.