Derailed Tax Reform

Banish the thought that you will be paying less income taxes next year.

That's because the proposed measure lowering the country’s individual and corporate income-tax rates can no longer be passed by the House of Representatives due to lack of time as many lawmakers would be focusing on the proposed 2016 P3.002-trillion national budget and the 2016 national elections.

Per the legislative calendar, Congress will adjourn on October 10 and resume on November 3 before taking another break on December 19. The third and last regular session of the 16th Congress is expected to be cut short because of the 2016 elections.

The House version of the measure seek the revision of income taxes for compensation income earners, self-employed, professionals and corporations through the simplification of tiers and rates, and indexation to inflation.

Malacañang, taking the cue from the Department of Finance, has already rejected the passage of the long-pending bill as the government “cannot put our fiscal sustainability and credit rating at risk by doing piecemeal revenue-reducing legislation.” The DOF is adamant in saying that  reducing the individual income and corporate tax rates may cause the government to lose revenues totaling as much as 1.5 percent of the country’s gross domestic product, or P30 billion.

The authors of the tax reform bill in the two houses of Congress had met with President Aquino and presented various arguments and reasons for tax reform. But it appears that the Finance department's stand had prevailed in the end.  

Will the next administration be receptive to the idea of giving Filipino workers relief from high income taxes? Let’s wait and see. 

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