Lower income tax rates mean less resources for poor — BIR

Lowering tax rates in the country would also lessen resources to finance government programs for the poor, the Bureau of Internal Revenue (BIR) said on Monday.

This would mean that inclusive growth—the equal opportunity for the different sectors of society with economic gains trickling down to the masses—will be difficult to reach.

"If it is just merely lowering the tax rate, mathematically it means lesser resources for government to spend on programs that will help the poor," BIR Commissioner Kim Jacinto-Henares said in a text message.

On the other hand, Henares said that if it were a real tax reform which would be revenue positive or neutral, compared with just lowering tax rates, "then it should not have a negative effect."

"We have already said we are in favor of tax reform where we will make our system equitable and this means more than lowering tax rates," she said.

She cleared, however, that she would be open to lowering tax rates provided it includes lifting of the bank secrecy law, making tax evasion a predicate crime for money laundering, and rationalizing exemptions. She did not elaborate.

During the Vice Presidential PiliPinas Debate on Sunday, all six candidates -- Senators Alan Peter Cayetano, Francis Escudero, Gregorio Honasan II, Ferdinand Marcos Jr., Antonio Trillanes IV, and Camarines Sur Representative Leni Robredo -- said they are open to lowering tax rates after raising a thumbs up sign when asked if income tax in the country should be reduced.

Half of them -- Escudero, Marcos, Robredo -- also said that economic growth under the Aquino administration has not been inclusive as the economic gains have not trickled down to the masses.

"Hindi pa po masyado nararamdaman ang inclusive growth," Robredo said.

"Wala pong ibig sabihin ang economic growth kapag ang poverty rate natin ay hindi nagbabago, kapag ang ating mortality rate ay hindi nagbabago," Marcos added.

For his part, Escudero said: "Hindi inclusive ang growth, hindi nararamdaman sa bawat sulok ng bansa." —NB, GMA News