Sen. Francis “Chiz” Escudero is urging Congress to tackle immediately the proposed legislation to lower income taxes after Malacanang expressed willingness to take a second look at the proposal that has, in a rare occasion, united labor and business groups.
“It took some convincing to get Malacanang to even consider the idea of lowering income taxes. Now that the Executive has finally opened up, we in Congress should waste no time in discussing and consolidating all proposals to trim individual and corporate income taxes,” Escudero said.
He said the goal is “to come up with legislation that will be fair to both government and workers.”
Escudero pointed out that Congress, which last year agreed to make tax reform legislation a priority despite the lack of support from Malacañang, has only until February 2016, or less than five months, to pass any legislation.
“We have very little time, considering we are in the middle of budget hearings, and there are other priority bills such as the BBL. But a just and equitable income tax system is something that we all want to have, and it falls on us lawmakers, and ultimately, President Aquino, to make this a reality for Filipinos,” the senator said.
“If we do not pass a tax reform law now, we will be back to square one in the next Congress. Meanwhile, Filipinos, whose taxes pay our salaries, will continue to be burdened by one of the highest income tax rates in the world,” he said.
Escudero, erstwhile chair of the Senate finance committee, said the Senate is awaiting the consolidated bill from the House of Representatives. Under the law, revenue measures need to emanate from the House before the Senate could pass its own version.
The House Committee on Ways and Means is working to consolidate 13 bills on tax reform. Its technical working group has come up with a proposal that exempts individuals earning below P180,000 annually from paying income tax and imposes a 30-percent income tax on individuals earning more than P1.1 million a year.
The consolidated bill also seeks to bring down corporate income tax from 32 percent to 25 percent and adjust to inflation income tax brackets that have been in place since 1997, when the Tax Reform Law was passed.
“We have the business community on our side, and we have tax experts willing to work for just taxation. Now is the time to sit down and discuss how, exactly, we can change the system so that the ordinary Filipino does not lose a third of his hard-earned income to taxes,” Escudero said.
The senator encouraged his fellow lawmakers to be prepared to thresh out the specifics of a law that lowers income tax rates, creates fewer tax brackets and facilitates the process of paying personal income tax.
“We have heard the cries and complaints of the salaried worker. We must not forget that any and all legislation should be for their benefit,” Escudero said.
Escudero is the sponsor of a bill that later became Republic Act No. 9504. It exempts minimum wage earners in the private and public sectors from paying income tax. The law covers the basic pay, holiday pay, overtime pay, night shift differential and hazard pay received by minimum wage earners.