Press Release
November 27, 2015

POE TO GOV'T ON CUTTING TAXES: IF YOU DON'T, WE WILL

If the current administration continues to ignore the tax reforms being pushed by lawmakers, traders and workers, the next set of leaders would take up the cause to ease the tax burden on Filipinos, Sen. Grace Poe said.

Poe, an independent presidential candidate and the frontrunner in presidential preference surveys, said lowering income taxes would be among her priorities in office, should she win in 2016.

"I stand on a vision of genuine inclusive growth, and this is one of the most significant reforms a government can undertake to show its compassion for the millions of wage and salary workers who lose up to a third of their hard-earned income to unreasonably high taxes," she said.

Under the Philippines' current income tax bracket system, a Teacher 1 who makes roughly PhP18,000 per month pays over PhP14,000 in annual taxes if she is single and has no dependents.

"Halos isang buwang sweldo and napupunta sa buwis. Isipin natin kung gaano kalaking bagay para sa ating mga kababayan kung maibabalik natin ang ganitong halaga sa kanila sa pamamagitan ng pagbababa ng buwis," she said.

According to the Bureau of Internal Revenue (BIR), 85 percent of the total taxes on compensation and business come from wage and salary workers, who comprise more than half of the country's labor force.

The increase in the annual take-home pay of a Teacher 1 due to lower taxes can buy more food for the family or provide an elderly with medicines or even serve as allowance for kids in school, Poe noted.

"Iyang extrang pera na makukuha ng mga mamamayan ay babalik rin naman sa ekonomiya dahil gagastusin din iyan ng mga tao para sa pang-araw-araw na pangangailangan o kaya naman ay para mag-invest," Poe said.

Since 1997, when the Tax Reform Act was passed, tax brackets in the Philippines have not changed. Salaries, however, have been adjusted to inflation, pushing more wage and salary workers into higher brackets, which compel them to pay higher taxes.

The 32-percent individual income tax rate in the Philippines for income over P500, 000 is among the highest tax rates in Asia.

"Sa palagay ko, panahon na para gawin ang re-bracketing na hinihingi ng ating mga kababayan matapos ang halos dalawang dekada na hindi man lang ito nagalaw,"said Poe.

"Kitang-kita naman natin ang epekto nito sa spending power ng mga Pilipino. Halos wala ng natitira sa sweldo pagakatapos ng deductions satax, insurance at iba pang contributions. Kaya karamihan sa ating mga guro, halimbawa, ay nababaon sa utang," she said.

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