Tax exemptions for the working class, not for local capitalists and foreign monopolies

By Bukluran ng Manggagawang Pilipino
September 20, 2015

QUEZON CITY – A militant labor group is calling on organized labor to rally behind the proposed measures by Rep. Quimbo and Sen. Angara that would raise the ceiling of tax exemptions. Angara’s bill, in particular, aims to exempt monthly incomes of below P88,000 from tax obligations.

The Bukluran ng Manggagawang Pilipino (BMP) argued that, “The proposed tax exemption would result into the much-needed increase in take-home pay for wage and salaried workers who earn more than the atrociously-low minimum wage and are not covered by the orders of the regional wage boards since their creation in 1989. But more importantly, it is the height of injustice that the Philippine government could afford billions in tax breaks and incentives to foreign multinational monopolies – as cited by Sen. Angara and Rep. Neri Colmenares”.

They likewise complained that despite obvious bias of the Aquino administration, “it has the gall to complain of the P30 billion that would be reduced from the nation’s coffers due to the Angara-Quimbo bill – as alleged by the finance department”.

“The proposals would not cause a big loss in the tax base for the Bureau of Internal Revenue (BIR) since the increase in take-home pay will spur consumption and increase the collections for the value-added tax,” Leody De Guzman, chairperson of BMP disputed.

He further explained that, “The proposal is a step towards the reform of the present regressive taxation system, which operates under the principle: “those should who have less in life should have more in taxes”. At its present structure, the tax burden is borne more by workers whose wages have automatic deductions for withholding taxes than by corporations that have access to various legal means of tax avoidance both to their corporate incomes and properties – contrary to the Constitutional policy for a “progressive taxation system”.

The militants believe that the workers deserve a reprieve from almost six years of hardship under the neoliberal and elitist regime of Noynoy Aquino.

De Guzman pointed out that, “Despite its anti-corruption rhetoric, which is but a pretense to attack its rivals in the political opposition, public funds are still use to enrich those who are in power. As long as billions of state funds are lost to corruption, taxpayers – especially the working class who are the most tax-compliant sector of Philippine society – have every right and reason to call for less taxes, or even for a tax revolt”.

“From whence do all taxes come from? It is from the collective toil of millions of workers. Yes, all taxes, in general. Not just the deductions for withholding taxes to already starvation wages but also taxes to corporate income and property as well. In the production of goods and services being bought and sold at the market, workers create not just the commodity but also its value. They add to the existing value of materials and tools used. This “value-added” is the well-spring of wages, profit, rent, interest – all of which are subject to tax. Hence, wages should be tax-exempt not just because it is below the Constitutionally-mandated living wage. More so, since the taxes paid by employers, bankers, and landlords come from the surplus value that was created by labor but unpaid by capital,” he continued.