Bills on income tax, subsidy cuts pushed

By Michelle Remo
Inquirer
Last updated 05:18pm (Mla time) 08/05/2007

BILLS THAT will simplify the income tax system and cut subsidies to industry are expected to be discussed when Cabinet officials and lawmakers meet this week to decide on the priorities for the 14th Congress.

 

Finance undersecretary Gil Beltran, who will attend Tuesday’s meeting in Malacañang, said the government was hoping Congress would adopt the proposed simplified net income tax system (SNITS) and the rationalization of fiscal incentives.

 

Under the SNITS plan, professionals and self-employed individuals will have the option of deducting a uniform rate of 40 percent from their gross income to determine their taxable income.

 

This will simplify the current system that requires the self-employed to compute allowable deductions, such as expenses related to operation of a business, to arrive at their taxable income. The tedious process of computing discourages some from religiously pay their taxes, finance officials have said.

 

It is also under the SNITS that the Department of Finance (DoF) wants minimum wage earners exempted from the income tax. The DoF said that although this will result in lost potential revenues for the government, the amount would only be minimal at about P500 million a year.

 

The DoF had said this was something the government could afford if it wanted to ease the burden of rising oil prices and the higher value-added tax on low-income earners.

 

The rationalization of fiscal incentives, on the other hand, is a measure aimed at lifting tax and duty exemptions enjoyed by some business sectors. The DoF said the government should be giving fiscal incentives only to exporters, who contribute to the country’s foreign currency reserves, or industries that are in the infancy stage.

 

The DoF said that the government loses close to P300 billion in potential revenues every year to the grant of fiscal incentives to various industries.

 

The National Economic and Development Authority earlier said it was working for a bill that would require the national government to fund political parties.

 

NEDA Director General Romulo Neri said the objective was to prevent political parties from seeking financing from sectors that have vested interests.

 

“The executive and legislative should consult each other on what bills to push. On the part of the Cabinet, it will be useless to advocate for bills if these are not the ones prioritized by Congress,” said Beltran.

 

Beltran said it was prudent for legislators to know the objectives of the measures being pushed by the Arroyo administration. Harmonizing the objectives of the two branches of government was necessary so that time and effort to legislate a law would not be wasted on debates, he said.

 

Legislators expected to be present during the meeting of the Legislative-Executive Development Advisory Committee are Senator Francis Escudero III, chairman of the ways and means committee, and Rep. Exequiel Javier, chairman of the same committee in the House.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: