A SALUTE TO LABORERS, OUR HERO-TAXPAYERS!

May 1 is International Labor Day. A day to honor many of us, who are salaried workers and part of the working class.

I do not know what will be the demands of labor groups for this year's Labor Day celebration but, there is one thing that we, salaried workers, can all ask from our legislators and the National Government -- that this, the much-awaited Individual Income Tax Reform. 

Salaried workers are undeniably our Hero-Taxpayers. 

In 2013, out of P246.58B in BIR tax collections from individual taxpayers, P200.77B was contributed by salaried workers through the automatic withholding tax system. That is 81% of the total collections from individual taxpayers! 

Meanwhile, for the same year, out of 14.3M registered individual taxpayers,12M of them (84%) were salaried workers.

Easily, without lifting its finger, the Government immediately collects from the working class the biggest chunk of its tax collections from individuals. Under the withholding tax system, the BIR simply relies on employers to remit the taxes withheld from their employees. 

Despite this, salaried workers are not given the honor due to them as Hero-Taxpayers by making the individual tax system more fair and equitable. 

To-date, the income tax table remains to have outdated income brackets, with the top bracket subject to the maximum income tax rate of 32% being pegged at a measly P500,000. The tax system also remains to be very complicated and the cost of compliance very high, which discourages self-employed and professionals from contributing their fair share of taxes, thereby resulting to a very narrow tax base.

With this, we need to call on our legislators and the National Government to honor our Hero-Taxpayers by seriously pursuing Individual Tax Reform. 

While there was a new law increasing tax-exempt bonuses from P30,000 to P82,000 effective January 1, 2015 for which salaried workers are thankful for, there are pending bills in Congress and proposals submitted by the Tax Management Association of the Philippines (TMAP) that effectively provide for more comprehensive reforms in the individual tax system. 

These ought to be immediately taken up when Congress resumes its sessions this May so that a consolidated bill, particularly on the revision of the individual income tax table, could soon be passed and submitted to the Senate for its concurrence. Once approved by both Houses, there is no justifiable reason why the President should not sign it, even considering the adverse position of the Department of Finance (DOF) and the BIR which stems mainly from the loss of "easy" revenue collections from their end. 

On Labor Day, the best gift that our Government can give to honor our Hero-Taxpayers is an Individual Tax Reform package that will make the system more fair, equitable and simpler. 

Otherwise, with the ASEAN Economic Community (AEC) integration starting 2015, we might as well expect greater Filipino worker mobility, largely driven by our country's very high individual tax rates.  

Mabuhay ang mga Manggagawa...ang mga Buwis-Bayani ng ating bansa!