Solon thumbs down Duterte proposal to adopt gross taxation scheme

Albay 2nd District Rep. Joey Salceda holds a press briefing in Malacañang for President Rodrigo Duterte’s tax reforms and the proposed 2020 national budget. Nestor Corrales/INQUIRER.net

MANILA, Philippines — President Rodrigo Duterte’s proposal to compute corporate taxes based on gross revenue rather than taxable net income is likely to meet fierce opposition in Congress.

In the weekly economic briefing in Malacañang Wednesday, Albay 2nd District Rep. Joey Salceda, chairman of the House ways and means committee, said the existing taxation scheme is already “working” and a shift to gross income taxation will be “grossly inequitable.”

“The current one, it’s working. Let’s just make it better. Just put good people there,” Salceda said, adding that gross taxation will not be good for low margin parties.

“We just have to have structural approach rather than shifting to gross income taxation because it is grossly inequitable actually,” he added.

Salceda’s panel is in charge of tackling tax-related measures.

Any changes in the country’s tax scheme would need approval by Congress.

The President last week said gross taxation would eliminate corruption in the Bureau of Internal Revenue (BIR) as it would remove discretion from tax examiners and negotiations between companies and BIR officials that usually follow initial tax assessments.

READ: Duterte pushes for gross taxation system to curb corruption

On Friday, Finance Secretary Carlos Dominguez said the government will form a group composed of top legal and economic officials that will look into Duterte’s proposal.

READ: Cabinet team to study Duterte idea on gross taxation

/kga