July 31, 2017
“Most tax compliant sector” proposes its own version of tax reform:
Workers call on BIR and Congress to stop corruption, plug tax leaks, remove incentives
As the Duterte administration pushes the Tax Reform Acceleration and Inclusion or TRAIN – a series of amendments to the country’s taxation system, members of the Bukluran ng Manggagawang Pilipino (BMP) staged a picket in front of the Bureau of Internal Revenue (BIR) main office in Agham Road in Quezon City today, to call for a pro-labor, pro-poor version of tax reform.
Duterte’s TRAIN is on the wrong track
Leody de Guzman, BMP national president said, “The proposed TRAIN is anti-poor and anti-labor. Its proposed increase in personal tax exemptions would only benefit less than 30% of the population since minimum wage workers – who are at the 7th decile of family income distribution – are already exempt from withholding taxes”.
“Worse, it would make up for the loss revenue in increasing income tax exemptions by imposing higher excise taxes on goods that are directly and indirectly consumed by the public such as sugared beverages and petroleum products, while lowering taxes that weighs down the privileged elite such as estate taxes. It is a train that is not only on the wrong track but also run over the workers and the poor,” the labor leader added.
“The president must be reminded of the Constitutional mandate for a progressive taxation system. Taxes on consumption, such as excise and the VAT, are generally regressive. Even if the majority poor consume less that the affluent few, higher consumption taxes would mean a bigger portion of their low income would go to taxes, especially because most, if not all, of their income are spent and have no propensity for savings. We propose more taxes for the rich, primarily based on income and property. Tax the rich; not the poor,” he clarified.
Pro-worker, pro poor tax and fiscal reforms
“We call on the BIR and Congress to stop corruption by punishing corrupt BIR officials, to plug tax leaks caused by legal but immoral tax avoidance, and to remove incentives enjoyed by multinational corporations,” de Guzman furthered.
The BMP cited the plunder case against Internal Revenue Commissioner Caesar R. Dulay and 17 other officials and personnel for allegedly reducing the tax liabilities of Del Monte Philippines Inc., causing the government to allegedly lose P29 billion in potential revenues.
The labor group also pointed to the P103 billion tax evasion case against cigarette manufacturer Mighty Corporation in 2016 and its suspected counterfeited of BIR stamps in 2017. It also mentioned the billions lost in government coffers due to tax incentives to entice investors. In 2011 alone, the government gave away P144 billion in tax incentives to foreign corporations. In 2013, tax incentives to seven (7) mining firms amounted to P4.5 billion.
“Wage workers are the most tax compliant sector, as compared to professionals, and to VAT collections from corporations. We are already overburdened by taxes. But instead of pursuing the wealthy to increase its revenue, the government wants to put add more of the tax burden to the workers and the poor. If Duterte wants to have billions for his golden age of infrastructure, he should get from the billionaires, not from the millions who are poor. After all, it is the richest 1% of the population – along with the top echelon of the bureaucracy – who would benefit from construction contracts and project financing of the government thrust to ‘build, build, build’. Simply put, those who have more in life should have more in taxes,” he concluded.