MANILA - President Rodrigo Duterte's plan to expand consumption taxes is not anti-poor, the Department of Finance said Tuesday.
The poor will continue to receive subsidies while senior citizens will still enjoy value added tax exemptions on raw food, medicine and education, said undersecretary and chief economist Karl Kendrick Chua.
Duterte's tax reform plan calls for the lifting of VAT exemptions and imposing new levies on petroleum and sugary drinks while lowering personal income taxes for middle-income earners to 25 percent from 32 percent. Tax rates for the ultra-rich or those who earn more than P5 million annually will be raised to 35 percent.
"Rather than being anti-poor, the tax reform plan will actually correct the injustice of only a few enjoying the benefits of growth," Chua said in a statement.
"Our primary goal here is to give everyone a better chance of building a more stable future by equalizing opportunities for all through the adoption of a simpler, fairer and more efficient tax system," he said.
Duterte promised to lower income taxes during the campaign and reiterated this during his first State of the Nation Address in July.
The current 32-percent income tax is the highest in Southeast Asia and has been seen as a turnoff for investors.