* Filipino worker earning P500,000 annually — 32% income tax
* Vietnamese worker earning equivalent of P500,000 — 20% income tax
* Cambodian worker earning equivalent of P500,000 — 12% income tax
* Malaysian worker earning equivalent of P500,000 — 11% income tax
* Thai worker earning equivalent of P500,000 — 10% income tax
* Singaporean earning equivalent of P500,000 — 2% income tax
* Bruneian worker earning equivalent of P500,000 — no taxes
President Aquino has thumbed down proposals by his allies in the legislature to lower income tax rates, saying it may create an adverse affect on the country’s economy.
The President fears that lowering income taxes may result to an inflated deficit since there will be reductions in the country’s revenue.
A bigger deficit may in turn have a negative factor when credit rating agencies start to evaluate the country’s economic performance.
“Ang tanong, kapag binawasan natin ‘yung income tax, mababawasan ‘yung revenue, lalaki ‘yung deficit. Iyong paglaki ba ng deficit magiging negative factor kapag ni-rate sa atin o ni-rate tayo nitong mga credit ratings agencies?” Aquino said.
He added that one suggested probable move to avert effects of lowering income taxes would be to increase the value added tax (VAT), which in turn will hit the income of all classes of society.
Aquino cited a possible increase in price of oil that may eventually affect cost of services and products.
“Ngayon, may mungkahi na kapalit ‘nung pagbababa ‘nung income taxes, tataasan natin ‘yung VAT, tataasan ‘yung mga sinisingil sa larangan ng langis. So kapag tinaasan natin ‘yung langis, for instance, o ‘yung taxes diyan, taasan lahat ng presyo dahil sa transportasyon, tataas ‘yung kuryente, et cetera, et cetera” he said.
So whether this move of lowering the income tax levels would be beneficial, the President is not so convinced. He said it could be reconsidered if there was a budget surplus, but given the current financial conditions, he said the country cannot afford to lower any taxes for that matter.
“So ang tanong, makakabuti ‘yung pagbababa ng income tax level sa mga kababayan natin? At ako’y hindi kumbinsido sa ngayon.” Aquino added.
The President said lowering income taxes may also go against the progressive taxation for which the constitution requires, which means those who have more should pay more, and those who have less should pay less, but the effects of lower income taxes maybe otherwise, and may hit the incomes of even the smallest income earners in the country.
“Parang ang hinihingi ng Saligang Batas ay progressive taxation, ‘yung mas may kayang magbayad, ‘yung mas mayaman, mas kayang magbayad ng buwis dapat mas malaking bahagi ang binabayad niya. Iyong mga tax tulad sa VAT damay lahat kung ano man ang sitwasyon mo sa buhay, kung ano man ang level ng society. So parang ‘yung VAT at saka ‘yung sa oil, tama lahat-tatamaan lahat, hindi yata ‘yon ‘yung hinahabol ng Saligang Batas na dapat progressive taxation.” Aquino said.
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