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Reaction Paper on H.B.

5636

By: Roz Lourdiz P. Camacho Ll.B. IV-B

HB 5636, approved on May 31, 2017, provides that the maximum rate of personal income tax
will be reduced over time from the current 32% to 25%, except for high income earners. According to
this new bill, those earning P250,000 or below annually will be exempted from paying income taxes.
The "ultra-rich," who comprise 0.1% of taxpayers, will be levied a higher rate of 35% from the current
32%. The Constitution provides that the system of taxation should be progressive. Is HB 5636 adherent
or contrary to this mandate of the supreme law?

HB 5636 is not violative of the Constitutional mandate that a progressive system of taxation be
applied. Its objective is similar to the Constitution which is to prevent the under-concentration of
wealth in the hands of few individuals. The original proponent of the bill, Quirino Rep. Dakila Carlo
Chua, had mentioned that the aforementioned bill, aims to correct the regressive features of the
present tax system.

Progressive system of taxation is defined as one which takes a greater percentage of income
from taxpayers as their income increases. The intention is to shift the tax burden more towards those
with the greater ability to pay. This is exactly what HB 5636 endeavors - to make a system wherein the
rich, rather than the poor, carry the tax burden. The bill also provides for a valid classification which is
by no means prejudicial to the majority of taxpayers.

Although the measure also proposes higher excise taxes on refined petroleum products and
automobiles, except for buses, trucks, cargo vans, jeeps, jeepney substitutes, and special purpose
vehicles, a large chunk of the taxes is still from income of the taxpayers, here and abroad. It lowers
personal income taxes even with the public shouldering the increase in prices of basic goods and
services as a result of additional taxes on fuel and sugar-sweetened beverages. Furthermore, we,
taxpayers, can still maintain a progressive system by limiting the need or want for these commodities
such as fuel, by not being wasteful of our resources, and sugar-sweetened beverages, by minimizing
our consumption of this non-healthy drinks. These are simple yet effective means of unburdening
ourselves of unwanted and excessive taxes.

In conclusion, HB 5636 is in accordance to the Constitution providing for a progressive system


of taxation for the general welfare of the Filipino citizenry.

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