MANILA, Philippines – President Aquino yesterday thumbed down proposals seeking to lower the income tax of fixed-income earners, saying there is no government surplus for such tax relief.

“It’s okay if there is a surplus and we have been experiencing it for years. Then we can talk about it,” he told reporters in a chance interview in Iloilo City, where he led the inauguration of the P700-million Iloilo Convention Center.

The President said he is not convinced that lowering the income tax at this time would be beneficial. He said the proposal would increase the budget deficit, which would be a negative factor from the standpoint of credit rating agencies.

Administration lawmakers both at the Senate and the House of Representatives have been pushing for the lowering of personal income taxes, saying that tax bracket systems have been stuck at 1997 levels.

The President, however, described the proposal as regressive taxation, which is contrary to the mandate of the Constitution for progressive taxation.

Aquino said a lower income tax is only possible if the value added tax, including for petroleum products, would be increased. But he said an increase in VAT and a tax on oil products are also regressive taxation.

Bank secrecy law

Leaders of the House of Representatives said yesterday they would support Malacañang’s proposal to scrap the Bank Secrecy Law in exchange for its support to reduced income tax rates.

“I have a bill lifting the bank secrecy law for government officials and employees. The President should certify it as a start. Let us start with us in government before the ordinary citizens,” Sen. Francis Escudero said.

Bureau of Internal Revenue Commissioner Kim Henares had said a draft bill is being prepared to ease the restriction on looking into bank accounts for tax purposes and complement proposals for lower personal and corporate income taxes.

“We the people in government should serve as an example. We should take the lead in disclosing our wealth in order to remove any doubts on the minds of the people,” Escudero said.

Escudero’s bill seeks to compel government officials and employees, except those who serve in an honorary capacity, to submit a written permission or waiver in favor of the ombudsman to look into all deposits of whatever nature with banks within and outside the country, including investments in government bonds.

Any public official or employee who fails or refuses to submit such waiver will be barred from entering or continuing the functions of his or her office.

Not a condition

Senate President Pro-Tempore Ralph Recto said lifting the bank secrecy law should not be used as a condition for reduced income tax rates.

Sen. Juan Edgardo Angara also reiterated his call to reform the tax system to enable the working class to have more take-home pay.

“I’m still pushing for tax reform despite the clock ticking and political season fast approaching,” said Angara, chairman of the Senate ways and means committee.

Angara downplayed the argument of the finance department that billions in revenues will be lost once the tax reform measure is passed, saying it runs contrary to the under-spending of the administration.

“Government has money it cannot even spend because of absorptive capacity issues of departments. We could’ve done it already so why not a win-win reform where the working class taxpayers are at the center,” he said. – With Paolo Romero, Christina Mendez, Marvin Sy, Jennifer Rendon

Source: www.philstar.com/headlines