Senate eyes recommendation on tax breaks before yearend

Senate ways and means committee chairman Juan Edgardo "Sonny" Angara said they are also studying the removal of taxes on workers' bonuses, GMA News' Jamie Santos reported on "24 Oras."

 

Also being considered is the scrapping of taxes on bonuses for employees amounting to P30,000 and below, and raising the threshold to P100,000.

 

Some groups such as the Tax Management Association of the Philippines pointed out Filipino workers are among the most taxed.

 

The TMAP said individual taxpayers with taxable income of P500,000 and up are taxed 32 percent of their income.

 

By comparison, workers in Malaysia who earn the equivalent of P1.3 million a month are taxed only 26 percent. Those in Cambodia who make P1.6 million are taxed up to 20 percent.

 

In Singapore, those making the equivalent of P11.2 million are taxed 20 percent.

 

 

Mixed views

 

During Thursday's hearing, some agencies acknowledged the burden of taxing on employees, along with the need to revisit the taxation setup.

 

The Tax Management Association of the Philippines and Confederation for the Unity, Recognition and Advancement of Government Employees supported the Senate's study.

 

"Any adjustment of the income tax brackets would already be big help in terms of the individuals because an adjustment in the amount, for example in the 13th month pay, income tax base, the other benefits would actually be helpful to all the individuals," said Tax Management Association of the Philippines president Rina Lorena Manuel.

 

For his part, Courage president Ferdinand Gaite said workers' wages are not enough to make ends meet.

 

On the other hand, Finance Undersecretary Jeremias Paul Jr. said the tax relief proposal should be studied carefully.

 

"Who would not want a tax break? But we have to have a reality check. We need to finance all these infrastructure needs, we need to finance all of the social needs. Kung wala naman tayong pondo, how will we be able to finance this and if we do not maintain our basic macroeconomic stability, there would be also implications also on inflation," he said.

 

The Bureau of Internal Revenue added it has no problem with tax breaks but services could be affected due to fewer funds.

 

"Kung bababa ang koleksyon dapat ibaba rin ang gastos. Ibig sabihin may maaapektuhan na programa. Kung hindi bababaan ang gastos sa kabila ng mababang koleksyon, mangungutang ulit ang gobyerno para mapondohan mga proyekto," she said.  — Joel Locsin/ELR, GMA News