President Aquino is not in favor of lowering the income tax rates.
鈥淭he question is, will lowering the income tax rates benefit our countrymen?鈥� Aquino said in Filipino. 鈥淚鈥檓 not convinced it would,鈥� he told reporters in Iloilo City on Monday where he inaugurated the new convention center.
Instead, he said he favored the status quo, meaning the government would not lower income tax rates but would not raise the 12-percent value-added tax (VAT) on goods and services either.
Malaca帽ang earlier said there would be 鈥渘o change in tax rates and no new taxes but also no tax cuts. Government will just focus on improving collection.鈥�
Aquino recalled that when he ran for President in 2010, he promised that 鈥渢axes will be collected assiduously.鈥�
He noted that his administration had been 鈥渁ble to manage the budget deficit, which continues to go down as a proportion or as a ratio to the gross domestic product that, in turn, was one of the factors we鈥檙e given investment grade status by the rating agencies. We鈥檙e continuously given upgrades.鈥�
鈥淚f we lower the income tax, revenues will go down, the deficit will grow,鈥� he said in Filipino.
On a proposal to lower income tax rates but raise the VAT, the President said that would mean an increase in taxes paid by oil firms.
鈥淚f we raise oil taxes, all prices will rise鈥攆or transportation, electricity, etc., etc.,鈥� he said, adding that 鈥渁 hike in the VAT and in oil prices will affect everyone. And the ones who will be affected most are those that can afford it the least.鈥�
Both Finance Secretary Cesar Purisima and Revenue Commissioner Kim Henares have opposed House Bill No. 4289, which seeks to lower income tax rates.鈥�Jerry E. Esplanada