Finance open to changes in tax system | Inquirer Business

Finance open to changes in tax system

By: - Reporter / @bendeveraINQ
/ 02:01 AM October 31, 2014

The Department of Finance is open to implementing changes in the integration.

“This is in the light of efforts to accelerate Asean integration and boost the Philippines’ competitiveness,” Finance Secretary Cesar V. Purisima said in a statement.

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However, Purisima warned that “lowering income tax rates may attract more foreign investors into the country but will be detrimental to our fiscal health if they are not offset by revenue-generating measures.”

Purisima said the DOF was maintaining its position that “any tax reform pursued must be holistic, revenue-neutral, and equitable so all Filipinos may continue to benefit from a robust fiscal position.”

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Congress is moving to raise to P70,000 the tax exemption cap on 13th month pay from P30,000 at present.

In the meantime, the organization of the country’s tax managers is pushing for income tax exemption for those earning P300,000 or less a year while expanding the tax base to include more payers in the informal sector and among self-employed professionals through easier payment procedures.

During the Tax Management Association of the Philippines’ (TMAP) general membership meeting on Wednesday, group president Rina Lorena R. Manuel said a “fair, equitable and simplified” income tax regime would augur well to increase the government’s tax take.

As the bulk, or about 85 percent, of the taxes are being shouldered by employed individuals, TMAP will ask Congress to make income taxes “lighter while distributing the share of the tax burden to a bigger portion of the population.”

TMAP’s proposal calls for an all-inclusive, tax-exempt annual income threshold of P300,000. At present, a tax base of P10,000 or less is slapped a 5-percent tax rate.

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TAGS: Asean integration, Business, Cesar Purisima, Department of Finance, Finance, tax exemption, tax system
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