Do you know who your congressman is? Have you talked to any of the senators you have elected? Let me give you 8 reasons to meet with your legislators so you can help me make sure that my ambitious proposal for our taxpayers can be passed into law before PNoy steps down or continues for another six more years?
Here’s my proposal for a fair income tax table exclusive for employees.
|Not over P100,000||Exempt|
|Over P100,000 but not over P250,000||P5,000 + 5% of theexcess over P100,000|
|Over P250,000 but not over P500,000||P12,500 + 10% of theexcess over P250,000|
|Over P500,000 but not over P1,000,000||P37,500 + 15% of theexcess over P500,000|
|Over P1,000,000 but not over P2,500,000||P112,500 + 20% of theexcess over P1,000,000|
|Over P2,500,000 but not over P5,000,000||P412,500 + 25% of theexcess over P2,500,000|
|Over P5,000,000||P1,037,500 + 30% of theexcess over P5,000,000|
If this is considered, a regular employee earning P30,000 monthly salary will only have to pay P18,500 income tax from the P68,000 he would have to currently pay under the outdated and outrageously burdensome tax rates. This will not compromise our tax collections as income tax from employees is only less than 10% of the 60% collections from income tax, or roughly 6% of the total collections. Without PDAF or DAP, I don’t this will be a concern.
So, here are the 8 reasons or things you need to lobby to your congressmen:
Separate the personal income tax table of employees from professionals and self-employed. It will be very unpredictable to determine the revenue losses once income tax rates for individuals are decreased as many professionals (i.e., doctors, lawyers or accountants) and self-employed may abuse this as it is being abused now. The employees are the only honest taxpayers when it comes to full compliance as their income taxes are withheld at source.
Provide a wider bracket with lower income tax rates to increase the purchasing power of those earning significantly lower as compared to the richest businessmen and professionals in the country. This is the main driver of the senate bills sponsored by Senator Angara and Senator Aquino. But we need to put pressure on Congress as any revenue measure has to emanate from the lower house.
Grant incentives to employees as their taxes are withheld at source by giving higher personal exemption for married individuals, from P50,000 to P100,000. The government cannot provide it all. We need to empower our people, especially the employees. By providing higher personal exemption aside from lower income tax rates, employees will have more purchasing power to pay for their basic needs especially for their families.
Remove the limit in claiming additional exemption for dependents, to help parents in providing decent living and proper education for all their children. We already have RH law to provide health services, especially for women, but despite the assistance of the government, malnutrition, out-of-school-youth and poverty in general is still rampant in our society.
We need to protect families, which is the basic unit of our society. By removing the ceiling of additional exemption for dependents and even increasing the additional exemption per dependent, those families with more than four children will get tax incentives and more funds to support their children.
Revisit the “de minimis” benefit to increase the non-taxable benefits, including a higher ceiling for 13th month pay and other bonuses, at least for the rank and file employees.
Working hard is never enough to enjoy a decent living in our country. Our skilled laborers and school dropouts always end up getting minimum wage, if not lower. And those who are smart enough end up working for smarter companies that would not give additional benefits than those required by law.
Worst, those who are given more benefits and bonuses are subjected to higher tax rates as it will be added to their gross compensation income. We need to give a breathing space to our employees for them to get more from their hard earned money. They have been the most honest taxpayers since the start. They complain, almost all the time, but they are never remiss of their duty to pay taxes. They need a break.
Lower VAT or VAT exempt for select-commodities. VAT or consumption tax is regressive. It hits the poor more than the rich. We keep on saying we want to alleviate poverty, and help the poor Filipino families and yet our tax system imposes heavy burden on them with the 12% VAT on all consumer goods considering their very limited resources to buy their basic needs like food.
Cost of consumer goods must be put down to make it more affordable for the greater majority. And lowering VAT or exempting some of the goods will greatly help our people.
Higher VAT for luxury items and high-end goods. A progressive tax system is what we need where those who earn more will have to pay more taxes. Rather than imposing tax on consumer goods, why not increase the VAT on luxury item or high-end goods.
Anyway, those who can afford these luxury goods definitely earn more than regular employees. Also, this will cover for any potential revenue losses brought by lowering income tax rates or increasing personal and additional exemption for employees.
50% tax on politicians for unexplained wealth or increase in net worth. Obviously, given the shortlist of tax eroding measures to unburden our people, especially the employees, we need a source of revenue to cover for the potential losses. Since our government is plagued with so many corrupt politicians, why don’t we impose tax on their unexplained wealth? This way, we can generate more revenues for the government. At the same time, hopefully, this will discourage or lessen the corrupt politicians in making our government a family business.
To know more about this advocacy for genuine tax reform, come to the INTEGRITY FORUM on August 20, 2014, organized by the Integrity Initiative, Makati Business Club, and European Chamber of Commerce of the Philippines. Email firstname.lastname@example.org or call 622-7720.