Imposition of Tax

Every problem comes with two sides – the good and bad.
And probably we all want to tell the version

of the story that makes our perspective true and good.
However, standing in front of you today is the leader of the opposition who wants to tell nothing but
the truth. The truth that can only be unfold after a deep understanding regarding the pros and cons
of the imposition of higher taxes on land and high properties for foreign buyers and property owners.
The first thing to ask is absolutely WHY IS THERE A PROPOSAL REGARDING TAX INCREMENT?
The answer is simple. The government had seen a problem in our tax system and the current
administration, as stated by the Asian Development Bank, needs to invest about 7% of GDP (Gross
Domestic Product) annually in infrastructure alone to support the country’s rapid growth. In fact, at
present, the Philippine government’s revenues are just under 20% of GDP and that is below 25% or
the required revenue for a developing or third world country.
Having said that, if the imposition of higher tax would be implemented, tendencies are:
First, we would get a relatively higher taxes which could be used as funds to support the projects of
the government. Second, foreign investors may think of expanding their businesses to compensate
the increase in corporate tax which could be a great door of job opportunities to Filipino workers.
And lastly, if these foreign corporations and investors decided to back off in penetrating our
business sector then there won’t be any instance for them to sear on higher positions, leaving the
Filipino workers just the doers of their respective business frameworks.
In contrary, IF HIGHER TAXES ARE TO BE IMPOSED given that our tax system today for corporate tax
rate is already as high as 30%, the highest one recorded compared to other neighbor and co-
developing countries in Southeast Asia, then what more if it continues to rise?
In fact, our government already proposed a bill named TRAIN 2 or otherwise known as Tax Reform
for Attracting Better and High-Quality Opportunities. Under this bill the government itself wants to
lower the corporate income tax rate and rationalize fiscal incentives. This is because cutting taxes on
corporations makes our businesses more competitive. And by lowering taxes, businesses will face
lower costs and higher profit margins, potentially generating more employment and investment.
While fiscal incentives which are tax privileges given by the government to business owners could
encourage them to invest, expand and innovate more efficiently. And these includes the income tax
holidays, preferential tax rates and other special privileges.
Additionally, given that under our own Constitution, a foreign investor or buyer cannot actually own
a land property but could only share at most 40% of the total assessed value of the land, we cannot
directly say that we are imposing the increment of tax rate alone to the foreign investors. Rather,
we are both targeting a Filipino investor and a foreign investor to pay additional tax whether we like
it or not.
Another thing to be considered is that, if we were to lose our foreign investors just because of
imposing a higher tax rate, we are also losing our partnership in the international corporate law. We
are also damaging our own image in business industry as other foreign investors pull out their shares
because of the unjust tax system.
But that is not the worst thing that could probably happen upon implementing the imposition of tax
increment. Why? Take this for example. If I were a businesswoman facing a sudden change of revenue,
I would not leave the company that is already competitive in the market just because I had to pay for
a higher corporate tax. To supplement the loss the tax reform had brought to my company, I can
reduce my man power. I can actually lower the salary of my employees or increase the price of
commodities being offered by my company. Then, this counter-solution of high property and land
owners could greatly hurt the people coming from the grassroots of our society.
The collected funds coming from the tax increment alone could not compensate the everyday
expenses of each Filipino worker who will unfortunately suffer employment termination or salary
deduction.
Now, the good and bad had finally weighted. Members of the house and dearest panel of judges, we
know how much the government desperately need to increase their funds. However, increasing the
corporate tax is more of a pain rather than a gain to majority of Filipinos. We should not allow another
mistake to happen because a big group of underprivileged and marginalized workers are at stake.
Imposing a tax increment is not and will never be the answer to increase the country’s revenue.
WHAT THIS COUNTRY TRULY NEEDS IS A JUST, SIMPLE AND INVITING TAX SYSTEM. IN ORDER TO
ATTAIN THAT, WE, THE OPPOSITION, STAND FOR A LOW CORPORATE TAX. A LOW CORPORATE
TAX THAT WILL NEVER HARM THE FILIPINO WORKERS AND WILL ENTISE FOREIGN INVESTORS AND
CORPORATIONS WE NEEDED TO PRODUCE SUFFICIENT AND LIFE-LONG JOB OPPORTUNITIES AND
BUSINESS ADVANCEMENTS.

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Every problem comes with two sides – the good and bad.

And probably we all want to tell the version

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