MANILA (Mabuhay) – Despite popular calls to lower income tax rates, the Aquino administration is wary of supporting moves for lower taxes because of the potential impact on government programs, a Malacañang spokesperson said.
At a press briefing on Saturday, deputy presidential spokesperson Abigail Valte said that Sen. Juan Edgardo Angara and Marikina Rep. Romero Quimbo – proponents of bills to lower taxes – have met with President Benigno Aquino III but that he has yet to share how the meeting went.
“Well, marami po talagang mga grupo na nagbigay na ng kanilang posisyon that they support some form of lowering the income tax. However, siyempre, bilang ehekutibo at bilang pamahalaan that has to be studied carefully, which nakikita naman natin na binibigyan din at pinaglalaanan ng oras ng Pangulong Aquino iyong pagdinig sa ganitong mga panukala,” she also said.
The president has said in the past, however, that lowering income tax rates will reduce revenues. That might force the government to raise the value-added tax to 14 percent from the current 12 percent.
Earlier this week, 18 business groups called on Aquino “to reconsider his position and heed the voice of various sectors clamoring for income tax reform.”
“Contrary to the view that reducing personal and corporate income tax rates will increase the budgetary deficit due to a reduction of tax revenues, studies have shown that a reduction in tax rates, together with the simplification of the tax system, will help spur tax compliance, and thus broaden the tax base and improve tax effort,” the groups said in a so-called unity statement.
Asked whether the Palace is concerned that taxes will become an election issue and could affect the popularity of administration candidates, Valte replied:
“Tingin ko po si pangulo hindi po ganoon iyong konsiderasyon e. Ang konsiderasyon po talaga ng pangulo iyong magiging long-term impact po ng ganyang panukala doon naman po sa finances ng ating pamahalaan.” (MNS)