Tax reform should be pro-poor, progressive
Tax reform should be pro-poor, progressive
Research institution IBON said that government should be willing to forge a genuinely progressive tax system instead of adopting one that remains pro-rich. The group said this upon recent Congressional approval of the first part of the Department of Finance’s (DOF) Comprehensive Tax Reform Package (CTRP). Forging a truly progressive tax package is an important pending topic under fiscal and montary policies in the currently suspended peace negotiations between the Philippine government (GRP) and the National Democratic Front of the Philippines (NDFP), added IBON.
IBON said that as hyped, House Bill (HB) 5636 or the Tax Reform Acceleration and Inclusion Act (TRAIN) instructs the lowering of personal income tax. In particular, those earning no more than Php250,000 annually will pay less income tax starting January 2018. The bill requires an 8% tax on gross sales or receipts of the self-employed and professionals within the Value Added Tax (VAT) threshold of Php3 million. Those above this threshold meanwhile will be taxed a lower 30% of corporate income. Those receiving Php100,000 will be exempted from the 13th month pay. Lower estate and donor taxes of 6% will also be charged. Lottery and sweepstakes winnings from the Philippine Charity Sweepstakes Office (PCSO) will be taxed 20 percent.
Aside from excise tax on automobiles, HB 5636 imposes a Php10-per-liter excise tax on then VAT-exempted non-alcoholic sweetened beverages in liquid, powder or concentrate forms, said the group. The bill also imposes a substantial Php3-per-liter excise tax on diesel and liquefied petroleum gas and higher duties on gasoline and kerosene.
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