LEGAZPI CITY, Oct. 14 (PNA) -- Albay Governor Joey Sarte Salceda on Wednesday said he supports the House and the Senate in working out a tax-reduction scheme to help relieve the burden of the overtaxed middle class in the country.
Malacanang on Tuesday maintained that the Aquino administration wants a "holistic" rather than a “piecemeal” program amid mounting calls to lower the country’s income tax rates.
President Aquino rejected legislative measures to lower the current income tax rates last month because it will not help the economy and the people as it will decrease government revenues, expand tax collection deficit and affects and the country’s credit rating.
But Finance Secretary Cesar Purisima said he is open to changes in the prevailing tax rates a week after President Aquino stated his policy, saying the finance department is open to a holistic reform which will include an adjustment of the rates and brackets.
“The income tax reform was done 15 years ago,” said Salceda during a press briefing at the Albay provincial office of the Commission on Elections headed by lawyer Romy Serrano.
Salceda, the regional party chair of the Liberal Party in Bicol, filed his Certificate of Candidacy (CoC) Monday morning to run as Albay’s second district representative.
Candidates in the incoming national and local polls should discuss burning issues that affect the welfare of the people, he said.
Salceda said he is running for the second congressional district so he can fight for the rights, flesh out the constituents’ dreams and aspirations through a fair, progressive and peaceful community.
“The social revolution towards zero poverty through sustainable development will be unopposed and the economic paradigm for better lives through national competitiveness and countryside development is unstoppable,” is his guiding vision as he filed his COC.
It is his rallying call for some 235,754 registered voters in Camalig, Daraga, Legazpi City, Manito and Rapu-Rapu -- comprising the second district.
“But for me, at this stage of the economic cycle, it is the best policy to pursue because the Filipino workers deserve it, they worked for it but the current tax structure does not reflect the productivity of the ordinary workers,” Salceda said.
Although there is only one problem with that because the tax to GDP after the term of former President Gloria Macapagal-Arroyo was 13.8 percent and the planned move to lower the personal income tax brings it to 13.2 percent, which is already low, he added.
As one of the country’s tax hawks, Salceda, who is also the Liberal Party’s campaign chairman for Bicol, said he understands Malacañang’s apprehension.
“The Php30 billion projected losses from lowering personal income taxes is a big loss to government funds but there was an underspending of Php650 billion to offset the loss,” he said.
The Albay chief executive said that it is fundamentally flawed to maintain the bracketing scheme when there is seeping inflation.
“The middle class in this country is the most overtaxed compared to other countries and this will not stimulate faster growth because it is a disincentive to productivity,” he said.
“If you keep working because you want to be productive and you study harder and because you study harder, your wages go up but your net take home pay goes down,” Salceda said.
The government’s capacity to implement development programs and be competitive is based on its capacity to spend and government funds come but from people’s taxes, he said.
He said rationalizing the present tax scheme in the country is better use of people’s money and “we should adopt and support the Angara law.”
The Senate is working on the modified tax-reduction scheme under the leadership of Senator Juan Edgardo Angara, chairman of the Senate ways and means committee, while Speaker Feliciano Belmonte Jr. said earlier that the House of Representatives will continue to push for the passage of the income tax reform bill despite Malacanang’s initial opposition.
Angara said about three to four million middle-income workers will be affected by the proposal. (PNA) LAP/FGS/AT/CBD/EDS