MAP asks government Who pays for promised tax perks?
MANILA, Philippines — Business group Management Association of the Philippines (MAP) welcomed President Marcos’ focus on the Filipino households’ pain points during his fifth State of the Nation Address (SONA) on Monday.
But this early, the MAP has raised concern over the cost of the promised relief and who will ultimately pay for it.
In an interview with ANC, MAP president Donald Lim said Marcos’ focus on immediate household concerns such as food prices, jobs, health care, energy costs and small business tax relief was “very appropriate” with many families and businesses facing economic pressure.
“For the first time, I felt he (Marcos) was really talking to the Filipino people,” he said.
“I felt that was what we were looking for. It was a good laundry list and I think he checked most of the boxes,” Lim added.
He said the announcement of an income tax exemption for workers earning up to P350,000 is a welcome move as it would provide immediate relief, especially for the middle class.
However, he said there are many questions surrounding the President’s promises.
“The big question we were thinking is, where will you get this? If you’re giving a lot of tax relief, who pays? So that’s the big question,” he said.
“Hopefully, it’s not at the expense of the private sector, of the businesses,” he said.
He said businesses are already under heavy stress, citing challenges such as the energy crisis, geopolitics and low consumer spending.
He also cited the recent wage increase in Metro Manila and the proposed changes in the senior citizen discount, which would have the private sector shouldering the majority of the cost.
As the government provides immediate relief for Filipinos, he said it needs to be matched with sustainable investments, reforms and productivity.
He said as the government continues its anti-corruption efforts and reforms, infrastructure spending cannot be put on hold to support economic growth.
“When we go to our different chapters, they would say the government is not spending, we’re not feeling it. And the poorest of the poor, they are feeling the pressure already,” he said.
Infrastructure spending will not only address the country’s infrastructure gaps, but also create jobs.
Lim said that the country should give the Pax Silica initiative a chance.
Lim said the country should undertake a study that will consider the electricity, water and other infrastructure needed to support the initiative.
“I think there are too many doomsayers out there and very anti. There are some who are very pro. But again, let’s have a real objective take on this,” he said.
“Let’s see how it goes rather than saying no,” he added.
He said the initiative could help attract investments that will support the economy moving forward.
The Bureau of Internal Revenue is ready to carry out President Marcos’ proposed tax relief measures once it secures the approval from Congress, BIR Commissioner Charlito Martin Mendoza said.
“The BIR supports this direction and stands ready to faithfully and efficiently implement the measures that Congress may enact,” Mendoza said.
Several lawmakers have filed measures seeking to increase the tax-exempt annual personal income ceiling to P350,000.
Finance Secretary Frederick Go said while these measures provide higher take-home pay and ease the burden on micro and small enterprises, it may cost the government about P66 billion in forgone revenue.
In response to potential revenue losses, Go said the government could turn to excise taxes to offset them. The BIR collected P327.16 billion in excise taxes last year.
“Effectively, our workers will have a much higher take-home pay. They will no longer pay taxes, not even a cent,” Marikina 2nd District Rep. Miro Quimbo of the House ways and means committee said as a result of President Marcos’ new tax reform agenda. – Aubrey Rose Inosante, Delon Porcalla
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