PRESIDENT Ferdinand Marcos Jr. alone can not impose tax cuts. But the Philippine Congress could.
In his fifth State of the Nation Address (SONA), Marcos told the members of the 20th Congress to recalibrate the country’s income tax system by raising the minimum annual income subject to tax to P350,000, from the current P250,000.
According to Marcos, Congress should seriously consider passing tax reform legislation that could benefit millions of workers, adding that Filipinos should whatever has been earned through hard work.
He likewise hinted at cutting the income tax of other wage earners. The President however didn’t go further, and instead called on Congress to exempt small enterprises from corporate income tax, and broaden amnesty for unsettled taxes, including income, estate, donor’s, and value-added levies.
“To ensure the continued progress of the middle class amid the lingering effects of the crisis, we will pursue tax relief measures that promote growth, that generate revenue, and advance equity toward socioeconomic sustainability,” the President said in his speech.
APPEASING ANGER
Marcos came out with such a move in what looks more like an effort to appease the frustrations of the middle class representing 41.3 percent of the country’s 114 million population.
For the longest time, the middle class families were not included in the government financial assistance program.
Under its existing policy, the government only exempts annual earnings below P250,000 from 20 percent levy. Worse, the government imposes a graduated levy for families earning more than P250,000 and above as provided for under the Tax Reform for Acceleration and Inclusion Act implemented in 2018.
Interestingly, amending the National Internal Revenue Code, specifically to increase the income tax exemption ceiling, was not among the 52 priority bills of the Marcos administration in the Legislative Executive Development Advisory Council for the 20th Congress.
