Speaker Pantaleon Alvarez

THE House has rejected the Palace-proposed comprehensive tax reform package meant to raise P178 billion by imposing new excise taxes on fuels, the lifting of the exemption of the 12-percent value-added tax on goods and other commodities, and the scrapping of the tax exemption on the 13th-month pay. Speaker Pantaleon Alvarez and other lawmakers said they found the tax package “anti-poor and regressive” and ran counter to President Rodrigo Duterte’s desire to ease the plight of the poor.Not one lawmaker has volunteered to author and file the 25-page tax reform package bill drafted and submitted by the Finance department to Congress last week. The new taxes were slated to be implemented on Jan. 1 next year. The lawmakers also questioned the basis of Finance’s proposal to exempt from tax only those people with an annual salary of P250,000 and to scrap the tax exemption on the 13th-month pay. Under the Palace-proposed bill, the excise tax on gasoline amounting to P4.35 per liter would be increased to P10 per liter. The petroleum products that were previously exempted from the excise tax would be imposed a six-peso-per-liter tax. Those products include aviation turbo jet fuel, lubricating greases and oils, leaded and unleaded premium gasoline, naphtha, petrolatum and waxes as well as asphalt, bunker fuel oil, denatured alcohol used for motive power, kerosene, liquefied petroleum gas and processed gas. Finance would reduce the personal income tax of daily wage earners and salaried state workers to 25 percent from 32 percent. But the lawmakers says the 250,000-peso cap is “too low.” “Where did this figure come from? What is the basis for this?,” Bayan Muna Rep. Carlos Isagani Zarate said citing the study made by the think-tank Ibon Foundation.“The amount of P250,000 is way below the annual Family Living Wage of a Filipino that is now pegged at P396,390 or P1,086 daily.” Alvarez said there was no provision in the proposed bill on how to improve tax collection. Zarate said Finance should follow Duterte’s instruction last August to lift the anti-poor and gender-biased taxes. “[Finance] should drop its proposal to increase the taxes on oil products and to expand the value-added-tax base,” Zarate said. “This proposal is patently anti-people and would definitely have an adverse effect on consumers.” Even the lawmakers belonging to the minority bloc―including Reps. Lito Atienza, Edcel Lagman and Jerry Trenas―rejected Finance’s tax proposals. Quezon Rep. Dax Cua, chairman of the House committee on ways and means, said Finance’s rationale behind the lifting of the tax exemption on the 13th-month pay was that the salaried workers could still feel the benefit once the tax exemption on the 250,000-peso earnings was imposed. Gabriela Rep. Emmi de Jesus said the eight-member Makabayan bloc would closely monitor who would file the Palace-proposed tax bill, and that they would be with the Speaker in opposing its filing.