By: Bernadette E. Tamayo on July 29, 2018

TAXPAYERS would enjoy the benefits of the taxes being collected from them if the government would further broaden the tax base and collect more revenues for infrastructure and social services programs, a tax lawyer said on Saturday.

Euney Marie Mata-Perez said the country’s tax base is “very small” since only about 30 million pay taxes.
Mata-Perez, a columnist of The Manila Times, was one of the speakers of a forum sponsored by the Colegio de San Juan de Letran Graduate School dubbed “The Philippine TRAIN Law: To Where Shall the TRAIN Take Us?”

The other speakers were Euvimil Nina Asuncion, director for strategy economics and resource group of the Department of Finance and Reynado Cancio, National Economic Development Authority (NEDA) director for national policy and planning staff.

Asked when will taxpayers feel the benefits of Train, Mata-Perez said, “As an earning individual you must start feeling it. What happened is we have a very small tax base.”

“So, we have a huge, big chunk who are not paying taxes. But they get hit with excise and VAT (value added tax) because everybody buys goods.”

Mata-Perez said consumers would “really get hit (by the effects of Train Law) because of the indirect (tax). The excise tax and VAT is what we call indirect tax.”

“You get hit by somebody passing the tax to you. You’re not the one remitting the tax to the government. You were the one paying income tax. In a way the consuming public will get hit because ultimately, the end of the line will get hit,” she stressed.

Asuncion however defended the implementation of the Train Law.

“It is a landmark legislation because this is the first time that we’re doing tax reform not because there is a crisis, not because we have to answer for debt or there is a deficit. This is a reform that targets to address two things: poverty and inequality in the tax system,” she said.

“For poverty, the target is that by 2022 the 21.6 percent poverty rate will be lessened to 14 percent. And by 2040 we will be eliminating extreme poverty. So that is the target,” Asuncion added.

“We have a very unfair, inefficient, complicated tax system. So that is something that is being addressed. We made the tax system simpler by reducing some of the rates, allowing single rates to apply to certain individual taxpayers,” she said.

“We have also broadened the tax base by removing certain exemptions under the tax code,” Asuncion said.
Cancio, on the other hand, rejected calls to suspend the excise tax on fuel under the Train Law.

“What we need to recognize is not just the changes in the tax rates. That is an important part of the reform: to reduce personal income taxes, that will benefit our taxpayers, 99 percent of them. But it’s also about what we’re going to get out of the revenues that are going to be raised. That’s the main benefit for the farmers, some of the revenues have been earmarked for social benefits, education health, agricultural sector,” he said.

#taxbase #TRAINlaw #taxation #effectsoftrainlaw

From the The Manila Times Website on July 29, 2018

http://www.manilatimes.net/govt-should-broaden-tax-base-lawyer/424299/