- Posted March 10, 2014 by
'Lower Filipinos' income tax rates'
Angara was referring to his Senate Bill 2149, which is a “wish list that he will ask Congress to consider during President Aquino’s State of the Nation Address this year.
"The earlier it is submitted, the more time we can study it, and the better our bill will be," said Angara, chair of the Senate ways and means committee.
He stressed that the dynamics in legislation is that it will take a year for a bill to be passed into law, adding that submitting it this July will fit just right in the congressional template of doing things.
"And, even if the BIR is thinking of a delayed effectivity date for the law, there is still merit on the idea of submitting its proposal way ahead," Angara said.
The senator also said the tax agency should not treat its estimated annual revenue loss of P43 billion from reduced individual income rates as "unrecoverable."
"If withholding tax is converted into disposable income, then it can be recouped through the VAT on goods. If part of the salary intended to be remitted to the BIR will now be spent for goods, then it can still be recaptured through the tax on the goods bought," Angara explained.
"It will be also good for the economy. It is always better to plow money back in circulation, where it can stimulate the production and consumption of goods. Instead of government doing the spending for the people, let the people do the spending themselves," he pointed out.
Angara said the bill compresses the net taxable income brackets from the present seven to five, and lowering tax rates across-the-board.
At present, an annual net income, after allowable deductions, of P10,000, which is the lowest in the tiers, is taxed five percent.
"A policeman whose net taxable income is P150,000 at present pays P25,000 in income tax. Under my proposal, he will just pay P19,000 by 2017," Angara noted.