MANILA, Philippines – Deputy Speaker Miro Quimbo believes the government is capable of improving the country’s tax system, if only it would apply the same political will it is currently showing in the drug war.
The Marikina City 2nd District representative made the statement on Wednesday, January 11, when asked if the Department of Finance’s (DOF) proposal to increase the excise tax on fuel and remove the exemptions on the value-added tax (VAT) for senior citizens are necessary to improve the tax system.
“The issue of tax collection is also an issue of corruption. So if we can impose that will on the drug menace, which is certainly more dangerous, I think we can do it here. We should be doing it here. So all I’m saying is, there is a way for us to collect [revenue] without imposing new taxes,” Quimbo said in a Rappler Talk interview.
The DOF’s first batch of proposed tax reforms includes the restructuring of the personal income tax system and the expansion of the VAT base by reducing the coverage of its exemptions.
The maximum rate of personal income tax will be reduced over time from the current 32% to 25%, except for high income earners.
But the DOF is proposing an increase on fuel excise tax and the restructuring of the excise tax on automobiles, except for buses, trucks, cargo vans, jeeps, jeepney substitutes, and special purpose vehicles.
Quimbo explained that when imposing taxes, the government should be able to justify if doing so is necessary. If it is, then the taxes must be imposed on people who can afford it.
“We need to make sure that when this power given by the Constitution to government is exercised, you must first be able to prove that it’s necessary. And I feel like it’s not necessary. It’s not at this point. Most of it, most particularly excise tax on fuel, withdrawal of VAT exemption on senior citizens, the increase in taxes like I said on diesel, on aviation fuel, on kerosene, on LPG. These are things that will affect so many people but isn’t really necessary,” reasoned Quimbo.
“Why is it not necessary? I think it’s not necessary at this point in time because there are other areas where you can collect taxes from,” said Quimbo, citing the “huge gap” in the tax collection compliance among professionals.
“It’s been computed that just for professionals alone, you’re looking at P68 billion that can be collected as long as we do it correctly,” said the lawmaker.
The 'bayanihan' comparison
Quimbo, who used to head the House committee on ways and means, likened the issue of tax collection to the Filipino custom of bayanihan, which is commonly symbolized by people working together to carry a bahay-kubo from one point to another.
“It (taxation) has to be imposed on those who have the ability to actually pay it. It doesn’t mean you have to impose it equally. That’s the biggest misconception on taxation. No. You impose taxation or taxes according to the burden that they can carry,” said Quimbo.
He explained that in bayanihan, the people helping out in carrying the bahay-kubo are naturally not exerting the same amount of effort in the process.
“The bigger the person, man or woman, will exert more effort or will contribute more because that’s their capacity. But what’s happening today is that…’yung ibang malalakas, nakasakay pa sa bahay-kubo eh (those who are strong are the even inside the bahay-kubo)” said Quimbo.
The lawmaker is currently proposing a 3-phased tax reform plan in the 17th Congress. He has filed separate bills seeking to adjust the personal income tax rate to inflation, lower the corporate income tax rate from 30% to 25%, and grant amnesty on estate taxes. – Rappler.com