Villanueva urges gov't to ease taxpayers' burden

Senator Joel Villanueva has urged the government on Tuesday to implement policies that will ease taxpayers' burden by restructuring the country's outdated tax policy.

"Over the past decades, the taxes being paid by our workers have been increasing. Because our income tax policy has been left unadjusted since 1997, many of our Filipino workers, especially the middle class, are now taxed in the same rate as our billionaires," said Villanueva, vice chairman of Senate committee on ways and means.

The senator also noted that the taxpayers have long been suffering from the existing unfair and exorbitant income taxes. Compared to other countries in the ASEAN region, an average Filipino is taxed at among the highest rate of 32%.

"Sa loob po ng matagal na panahon, hinaing ng ating mga kababayan ang malaking kaltas sa kanilang sahod dahil sa mataas na buwis. Isa po ito sa mga dahilan kung bakit marami sa ating kababayan ang mas pinipiling mahiwalay sa kanilang pamilya para lang kumita ng mas malaki sa ibang bansa."

To address the said plight of taxpayers, Senator Villanueva filed Senate Bill No. 1062 wherein Filipinos earning P21,000 and below per month will no longer have to pay for their income tax.

In addition, the bill also proposes to impose a top marginal tax rate of 30%. This reduces the income tax from the top rate of 32% and ensures that Filipino will enjoy a tax cut without having to compromise tax progressivity and the need to collect tax revenue.

"This rate will harmonize our tax policy with those in other ASEAN countries," the senator further explained.

To prevent the sharp erosion of government collections, Villanueva has suggested to gradually adopt the said proposal within the span of three (3) years. On the first year of implementation, he proposes to index the tax schedule to inflation to reflect its 1997 values. On the second year of implementation, the bill will lower the tax rate and increase the exemption threshold to P100,000 annual taxable income. This will serve as a transition period before the proposal is fully rolled out on its third year of implementation.

Villanueva said he admits that the said income tax reform proposal will lower the government collection and asked the Department of Finance, along with partners in the private sector and civil society to submit their proposals on how the government can make up for the revenue loss.

"We all wish for every Filipino to contribute to the development of our nation. But we do not want our government policies to overburden them in doing so," Villanueva concluded.