Gibo favors raising sin taxes while reducing income taxes

Lakas-Kampi-CMD standard bearer Gilberto Teodoro Jr. said on Thursday that he favors raising the rate of expanded value-added tax (eVAT) from the current 12 percent to up to 15 percent if he wins the presidential race this May. But he is also mulling the option of reducing personal income taxes to 25 percent. Speaking before members of the Makati Business Club (MBC), Teodoro said that he agrees with proposals to raise the eVAT given the losses the El Niño dry spell is expected to bring the country, especially in the agricultural sector. “I agree in principle that we may have to increase consumption taxes for the simple reason that our income taxes and corporate taxes are the highest in this area to the point of being uncompetitive," he said. Teodoro likewise said that he is studying the proposal of former Budget Secretary Benjamin Diokno to reduce personal income taxes to 25 percent. The former defense secretary likewise said that he would push for the broadening of the tax base under his administration, as well as the raising of taxes on sin products such as tobacco and alcohol. “I propose, if need be, that we only increase the base of eVAT. Secondly, if it is unavoidable, (we might have to raise) the rate of eVAT and other excise and specific taxes particularly on sin products," he said. Teodoro likewise said that he is open to imposing taxes on text messaging, as long as it is beneficial to certain sectors. “I am opening to the possibility of studying it as long as it is dedicated for certain things, such as information technology, for schools and for research and development, but there are downstream effects of taxes," he said. Teodoro added however that changes in tax policies must go hand in hand with efficient tax collection and administration. “Even though you raise taxes, tax policy and tax administration must go hand in hand. Tax administration must be simplified until such time that businessmen can understand how to fill out their own tax return forms," he said. Target: 8% GDP growth per year In the same forum, Teodoro said he is targeting an eight percent growth in the country’s gross domestic product (GDP) per year if he is elected president in May. The administration party’s standard bearer said making the economy grow by eight percent per year would be the “greatest economic challenge" he would take on under his administration. “That’s a tall order, but it must be a goal that all of us should set our minds to in order for us to sustain that goal in the face of competition among our neighbors," he said. Teodoro also said that he plans to raise the per capita income of Filipinos from last year’s $1900 to $3200 after six years of his presidency, and twice as much in 2018. Teodoro is the third and final presidential aspirant to speak in front of the MBC. Senators Manuel Villar Jr. and Benigno Simeon “Noynoy" Aquino III have presented their respective platforms and views to the MBC members earlier this year. Noynoy’s tax policy ‘more macho’ MBC President Alfredo Lim said Teodoro gave a “very impressive" speech, and laid down “very specific" programs of government compared to the other two presidential aspirants who earlier spoke in front of the business club’s members. “His programs are very specific, and he really emphasized how he will go about his programs of government," he said. Lim likewise said that although the three presidential bets presented very similar programs of government, Aquino’s approach on tax policy stands out among the three. “Noynoy was different with his stand on raising tax rates and creating new taxes. He said that he would not raise taxes while the two others said they would keep their options open. Noynoy’s take on the tax issue is definitely more macho," he said. “It is reasonable to raise taxes if you know there is a deficit, but Noynoy’s answer really stands out just because it is different," he added. In his speech before members of the MBC last January, Aquino said he would not impose new taxes or raise tax rates if elected president. Last December, Aquino emerged as the top choice for president in a survey conducted among members of the MBC. (See: Noynoy, Mar lead MBC's survey on 2010 polls) - JV, GMANews.TV