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Tax reform will benefit Pinoys in the long run, businessmen say

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Arianne Merez, ABS-CBN News

<p>MANILA- Local businessmen believe that benefits of the Duterte administration&#x27;s proposed tax reform package will not be immediately felt by the economy but agree that it is a &quot;progressive&quot; approach to taxation.</p><p>“I think a tax cut will benefit the people eventually, but it will be in the long-term basis,” I-Remit Inc. Chairman and CEO Bansan Choa said.</p><p>Anton Periquet, chairman of BPI Asset Management, said the private sector understands the spending needs of the government to improve the country’s infrastructure and catch up with other countries. He said this is why a tax reform package is being proposed.</p><figure class="op-interactive"><div id="IVS_ABS_Body_Video_1_Container"> <ivs-player id="IVS_ABS_Body_Video_1" data-ivs-spid="3001339" data-ivs-key="e8c22c015ca9eafa76f1e3edfa03c603" data-ivs-vid="1455534" data-ivs-floating="1"></ivs-player> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/iframe-parent.js"></script> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/loader.js"></script> </div></figure><p>“The spending needs are urgent. The tax cuts can always wait. But you can tell from conditions in our roads, airports that the money is needed today not tomorrow to upgrade our infrastructure,” he said.</p><p>“If government can show that the taxes will give back quality education, roads, airport, police force, then people will be happy to pay,” he added.</p><p>Silliman Sy, president of the Chamber of Cosmetics Industry of the Philippines, believes that excise taxing should address the problem of a narrow tax base.</p><p>“You don’t tax the P80 lipstick, you tax the P600 lipstick,” Sy said of a progressive approach towards taxation.</p><p>However, businessmen agreed that the success of any tax reform plan would depend on investments in the country for benefits to be felt by Filipinos.</p><p>“If we don&#x27;t have enough investments coming in, even with the tax cuts, you can&#x27;t give benefits to those already spending taxes,” Choa said.</p><p>The government’s proposed tax reform package also sends a signal that the government is “trying to do the right thing” when it comes to tax collection and government spending, Philippine Stock Exchange President Hans Sicat said.</p><p>“Passage of this reform will signal a very strong change both in our political will and our system as well as a signal that the economic team is trying to do the right thing relative to collection versus spending,” he said.</p><p>Finance Usec. Bayani Agabin said the tax reform package is expected to be more effective and beneficial since low-income earners can bring home more without the government sacrificing funds needed for infrastructure projects.</p><p>“The idea is you spread the wealth and spend it wisely. We will spend it in infrastructure, health and education. These are long-term investments for our country,” Agabin said on ANC’s “Tax Reform: Funding the President’s Projects.”</p><figure class="op-interactive"><div id="IVS_ABS_Body_Video_2_Container"> <ivs-player id="IVS_ABS_Body_Video_2" data-ivs-spid="3001339" data-ivs-key="e8c22c015ca9eafa76f1e3edfa03c603" data-ivs-vid="1455535" data-ivs-floating="1"></ivs-player> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/iframe-parent.js"></script> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/loader.js"></script> </div></figure><p>Agabin explained that despite the proposed excise taxes, low-earning Filipinos will still be able to get more out of their income.</p><p>He said workers who earn around P20,000 to P40,000 a month are most likely to be P50,000 richer at the end of the year, based on their computations.</p><p>Even if these people decide to buy an entry-level car priced at around P600,000, they would only have to shoulder an additional P12,000 excise tax leaving them with still almost P40,000 more, he added.</p><p>“Look at it from the bigger picture and see what the government wants to achieve,” he said.</p><p>Asked if the government can lower personal income taxes without implementing higher excise taxes, Agabin said doing so may be worse for the economy since there are no offsetting measures.</p><p>“When you lower the income tax bracket so those who will earn P250,000 and below annually will not be taxed, you lose income. And you have to offset that with income-generating measures,” he said.</p><p>Sicat agreed with Agabin that depending solely on personal income taxes would be difficult for the country.</p><p>“Personal behavior is harder to monitor and therefore you tend to have under collection when you just rely on a personal tax system,” he said.</p>

<p>Local businessmen believe that benefits of the Duterte administration's proposed tax reform package will not be immediately felt by the economy but agree that it is a "progressive" approach to taxation.</p>

Local businessmen believe that benefits of the Duterte administration's proposed tax reform package will not be immediately felt by the economy but agree that it is a "progressive" approach to taxation.

Tax reform will benefit Pinoys in the long run, businessmen say

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Tax reform will benefit Pinoys in the long run, businessmen say

Arianne Merez,

ABS-CBN News

Published Mar 25, 2017 03:02 AM PHT

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