MANILA: The “Legitimate 8” or the House minority bloc led by Ifugao Representative Teddy Baguilat said it will block the passage of new taxes.
Albay Representative Edcel Lagman said on Tuesday, he fears the benefits from the planned tax reduction will be eroded by the imposition of additional tax burdens and imposition of tax on petrol products.
During the budget briefing of the Department of Finance on Monday, Finance Secretary Carlos Dominguez said the Duterte administration wants to lower the personal income tax and corporate income tax to 25%. He said lowering the personal and corporate income tax may result to a revenue loss of about ₱170 billion.
To compensate for the revenue losses, Dominguez said the Duterte administration is planning to remove the exemptions on Value Added Tax (VAT) except for food, medicine, and education, increase the excise tax on petroleum products, and to tax sugary and fatty food.
Lagman said many low income wage earners will not benefit from the reduction of income tax because they are already exempted from paying such. He added these people will not be spared from the cascading burden of the new proposed tax measures, such as the removal of VAT exemptions.
“The low income wage earners both in public and private sectors are already exempted from income tax. They will not benefit but will not be spared from the cascading burden of the tax relative to vat and excise on oil products because at the end of the line are consumers which would include the small wage earners who are not beneficiaries of the income tax reduction,” said Lagman. He also said with the new tax measures the DOF is proposing, there will be more tax collections than revenue foregone from the reduction of corporate and personal income tax.
