For the second time, President Aquino rejected proposals for personal income tax cuts on the basis of anxiety over the implication of a resulting P30 billion forgone revenues while completely ignoring the urgency of an updated indexation of fixed-income earners’ salaries to prices. For the Freedom from Debt Coalition, this is another clear display of Aquino’s fiscal double standard as it reveals this administration’s twisted practice of collecting more from the poor while incentivizing the rich.
Multiple burdens already weigh down ordinary workers who, amid oppressions of contractualization and casualization, struggle for daily survival on their measly wages. Indisputably, not living but “libing” (interment) wage as labor groups call it as it can barely ensure sustenance and is lightyears away from providing for a life of dignity.
These ordinary workers are now even denied of their rightful claim to whatever little enjoyment such wages can afford as they are saddled with an unjust income tax scheme that was determined 18 years ago. In 2014, the peso’s purchasing power was already at 43.8 percent or less than half of what it was in 1998, when the current personal income tax brackets were first implemented. Now, low-income earners can hardly pay even for basic goods and services while still subjected to paying the same taxes pegged at a time when the cost of living was lower than the present.
Aquino’s denial of a just tax scheme comes callously considering how he bends over backwards to ensure that private corporations, capitalists, are pampered with numerous fiscal incentives. He does not mind forgone revenues of P37 billion as long as private investors enjoy four to eight-year income tax holiday.
He even made provisions for P30 billion more in the 2016 national budget to ensure that the government can pay for the loans of private corporations should the latter default on debts backed by sovereign guarantees. This so-called Risk Management Fund, also known as the Contingent Liability Fund, is tantamount to a public subsidy to private corporations and this involves money from the public who are forced to pay unjust taxes. According to the Department of Budget and Management, contingent liabilities arising from the government’s public-private partnership scheme will reach 5.8 percent of the GDP in 2016. Using figures from the proposed 2016 budget, government-guaranteed debts would amount to P915 billion!
Last but not the least, perhaps instead of whining over the P30 billion revenue loss arising from giving back to taxpayers their rightful share, Aquino should also report to the public how much the government forgoes due to the lowering of tariffs prescribed by free trade agreements, which he dragged the country into.
On hindsight, Aquino’s fiscal double standard does not surprise us anymore. His interest remains that of the elite’s, the class from which he came from, and which his government’s neoliberal policies favor. It is now incumbent upon the 13.5 million compensation income earners, whose claim for tax justice Aquino rejected twice, to ensure that the likes of those who betray the interest of the people do not continue to remain in power.
Freedom From Debt Coalition
The Freedom from Debt Coalition (FDC) – Philippines is a nationwide multi-sectoral, non-sectarian and pluralist coalition conducting policy advocacy work and campaigns to realize a common framework and agenda for economic development.