Palace: 'No debate on need for tax reforms'

MANILA, Philippines – Malacañang clarified on Saturday, October 31, that the Aquino administration supports tax reform laws, contrary to the claim of its critics who have slammed it for hedging on the proposal to lower income tax rates.

"Let us be very, very clear with one point: There is no debate; we need to reform the tax laws," Presidential Spokesperson Edwin Lacierda said in an interview on state-run dzRB on Saturday, October 31.

Lacierda said, however, that the proposal to lower tax rates needs to be carefully studied as the Aquino administration did not introduce new taxes that would plug any revenue losses arising from it.

Addressing administration critics, he said: "We were able to generate so much revenue without even raising, without introducing new taxes, except for rationalizing the sin tax. That is very, very clear."

"We are all in favor of a greater take home pay but we need to review the tax laws comprehensively….We understand the concern of our countrymen so we will study this….We’re not against that.…Let us not mislead the public. The President and his Cabinet and this government [are] in favor of reviewing the tax laws," he added.

Think-tank Ibon Foundation scored administration standard-bearer Manuel "Mar" Roxas II for not outrightly supporting the proposed cut in income tax rates, unlike 3 other presidential candidates who favored it at a recent debate organized by businessmen.

Roxas echoed the administration's position that while he is in favor of reducing income tax rates, there is also a need to study the consequences of a reduced government income. (READ: To cut or not to cut? Presidential bets talk tax)

Cause and effect

Lacierda said that it's easy for other candidates to support such a proposal because it's popular among voters.

"You want to get the biggest number of votes [by saying something] that is pleasant to the ears of the electorate. But what we are saying [is] we are government; we have to be responsible. We recognize there’s a concern. We recognize that some people would like to lower the tax rates. And we’re saying, ‘We’re all together in this,'" he said.

On the part of the government, Lacierda said it has the responsibility "to look at the entire country in terms of the cause and effect."

The President's spokesperson also took exception to the statement of Leyte First District Representative Martin Romualdez, who said that President Benigno Aquino III's refusal to support the proposed tax reduction measure would mean his lack of concern for ordinary Filipinos.

Lacierda  stressed  that the Aquino administration had invested P75 billion ($1.6 billion) in its flagship anti-poverty scheme, the Conditional Cash Transfer Program, which directly assists 4.4 million families or over 20 million Filipinos.

Lacierda also cited the expanded public health coverage under the Philippine Health Insurance Corporation (PhilHealth).

The Philippines is said to have the second highest  average tax rate among Association of Southeast Asian Nations (ASEAN) member-nations, after Vietnam and Thailand. (READ: Is the Filipino middle class over-taxed?)

Some lawmakers and groups have been prodding Aquino to support the proposed  cut in income tax rates, among them, the Tax Management Association of the Philippines which staged a "Black Payday Friday" protest on Friday, October 30, to drum up support for the measure.  – Rappler.com

$1 = P46.73