Binay's proposed income tax exemption ‘good for the masses’

CAVITE, Philippines – The camp of Vice President Jejomar Binay on Thursday, February 11, defended his proposal to abolish the income tax for those earning P30,000 and below.

Binay’s spokesmen made the statement following an Inquirer report quoting Liberal Party-led coalition spokesperson and Marikina Representative Romero "Miro" Quimbo as saying that Binay’s proposed program would cut government revenues by half.

Kung ayaw, maraming dahilan. Pero kung gusto, may paraan. Tingin ko naubusan na rin sila ng think tank e, kasi lahat sila ngayon, sa mga kalaban, ay nasa election mode na. Naunahan lang sila ng UNA (United Nationalist Alliance) at ni Vice President, kasi maganda ito, malapit sa masa,” said UNA spokesperson Mon Ilagan in an interview with reporters during Binay’s sortie in Cavite City.

(If you don’t like something, you have many reasons not to do it. But if you want something, you find ways. I think they ran out of think tanks, our rivals, because they’re on election mode already. UNA and the Vice President proposed this ahead of them because it's good and close to the masses.)

Imagine, susuweldo ka P30,000 or less then, or about P360,000 for one year. Malaking tulong ito. Tax relief ito para sa mahihirap and it would benefit 6 million private and public employees. So sino ‘yun? Ito ‘yung mga policemen, itong mga teachers, mga call center agents, ‘yung mga mababa ang suweldo,” he said.

(Imagine, you earn P30,000 or less, or about P360,000 for one year. That’s a big help. That’s tax relief for the poor and it would benefit 6 million private and public employees. These are the policemen, teachers, call center agents and others with a low salary.)

During his proclamation rally on Tuesday, Binay said he would remove income tax for employees earning P30,000 and below if he is elected president. 

He said he would remedy the resulting government revenue losses by leading a crackdown on smuggling.

‘Leave it to the experts’

Ilagan explained on Thursday that the government is estimated to be losing P230 billion a year because of smuggling of agricultural products, P30 billion from oil smuggling, and P12 billion from tobacco smuggling.

“So ang laking pondo ang nawawala sa gobyerno. Naisip ito ni Vice President at least makakatulong ito hindi lamang sa mga ordinary workers kung hindi doon sa mga private sector because it will generate income, it will generate employment,” he said.

(So the government loses a lot in terms of funds. The Vice President thought about this to help workers in the public and private sector because it will generate income, it will generate employment.)

According to Ilagan, Binay plans to strengthen the government agencies involved in stopping smuggling activities in the country. (READ: The Leader I Want: Jejomar Binay's to-fix list for 2016)

He will leave it to the experts kung papaano mareresolbahan itong ating problema sa smuggling.  Kasi right now, kung makikita natin, mukhang kapos sa pondo, kapos sa pangongolekta ang target ng BIR (Bureau of Internal Revenue) at Bureau of Customs,” he said. 

(He will leave it to the experts how to solve the problem of smuggling. Because right now, we can see that the BIR and the Bureau of Customs are falling below their collection targets.)

By putting an end to smuggling, the Vice President believes that the government would be able to generate more revenues compared to the projected P30 billion it would lose from reducing income taxes.

Convene LEDAC

Binay, if he wins the presidency, also plans to convene the Legislative Executive Development Advisory Council (LEDAC) during his first 100 days to push for his income tax exemption proposal. (READ: Binay to businessmen: We'll be partners for the country's good)

His economic adviser, former finance secretary Margarito “Gary” Teves, said that reforming the country’s current tax system will not necessarily lead to higher value-added tax (VAT).

“Raising VAT is not the only way to compensate the revenue loss. We already have a menu of options to compensate for the potential revenue losses from reducing tax rates,” said Teves in a statement sent to reporters.

Apart from fighting smuggling, Teves said these include the sale of government assets and the privatization of a number of government-owned and -controlled corporations, approval of revenue-generating measures, and continued improvement in tax administration and collection efficiency. – Rappler.com

Mara Cepeda

Mara Cepeda writes about politics and women’s rights for Rappler. She covers the House of Representatives and the Office of the Vice President. Got tips? Send her an email at mara.cepeda@rappler.com or shoot her a tweet @maracepeda.

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