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20 years ago? To give you an idea, the peso and dollar rate was still less
than 10 pesos, there was limited internet access and we were in the
verge of economic boom under the Ramos administration. And I was
still in the elementary. A lot of things have happened between 1997
and 2016 and yet the Tax Code remained the same.
Inflation rates have steadily increase for several years. In turn, the
value of peso now compared to 1997 is much lower. And yet, the tax
bases and tax rates for income remained unchanged. First and
foremost, tax bases and rates should be flexible enough to counter the
changing times and environment. Although, taxes are the lifeblood of
the government, it is imperative for the government to imposed taxes
that are reasonable and just. As the saying goes, dont kill the goose
that lays the golden egg.
That being said the government should look to increase the tax
base and decrease the percentage. By doing this, people shall have
more discretion on their hard earned money. There are more
opportunity for consumption and investment. This will help the
economy as there are more people willing to spend or engage in
proprietary activity.
The 32% income tax is the highest in Asia. This would have been
tolerable if people could actually feel that the taxes they are paying
went to valid government programs, infrastructures and the like. Its
difficult to automatically give up 1/3 of your income without getting
any in return. Lowering the rate to 25% is a reasonable amendment as
it eases the burden to the general public. Let the public decide where
to consume the 7%.
I have been working for the BIR for six (6) years. I can honestly say
that our tax code is one of the most complicated and difficult to
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These are just some of the changes I hope to see in the future within
the organization I belong to. It would be take years to institutionalize
these reforms but I am positive that it is worthwhile. Change is coming.
Reference:
R.A. No. 8424, The Internal Revenue Code of 1997 as amended by R.A. No.
10653.