MANILA - Senator Juan Edgardo “Sonny” Angara urged the Bureau of Internal Revenue (BIR) to submit as soon as possible a proposal on lowering the income tax rates of individuals so that President Benigno Aquino III can include it in his State of the Nation Address (SONA) wish list.
"The earlier it is submitted, the more time we can study it, and the better our bill will be," said Angara, chair of the Senate ways and means committee.
"The dynamics in legislation is that it will take a year for a bill to be passed into law. So I think submitting it this July will fit just right in the congressional template of doing things," he added.
Angara earlier filed Senate Bill 2149, which seeks to reduce the income tax rate from 32% to 25% by 2017.
On Sunday, Malacanang said more studies and consultations are needed if Congress plans to push Angara’s bill.
In an interview with radio dzRB, Communications Secretary Herminio Coloma Jr. said any adjustment in the country’s taxes will affect its spending program, especially for the needed infrastructure.
“‘Yun pong pagbubuwis ay mahalagang aspeto ng kabuhayan ng ating bansa at kailangan po ang masusing pag-aaral. Kasi po kapag pinalitan ‘yung mga batayan ng pagbubuwis ay maapektuhan ang kinakalap na rentas internas ng ating bansa na siya namang pinagkukuhanan ng pananalapi para tustusan ang iba’t ibang programang pangkabuhayan ng ating pamahalaan,” he said.
Angara said, however, that the government should not think of the estimated annual revenue loss of P43 billion from reduced individual income rates as "unrecoverable."
"If withholding tax is converted into disposable income, then it can be recouped through the VAT on goods. If part of the salary intended to be remitted to the BIR will now be spent for goods, then it can still be recaptured through the tax on the goods bought," he said.
"It will be also good for the economy. It is always better to plow money back in circulation, where it can stimulate the production and consumption of goods. Instead of government doing the spending for the people, let the people do the spending themselves," he added.