Balisacan on tweaking income tax exemption

If you increase the income tax exemption threshold, the government loses money to fund its various projects and services.  Thus, the legislative branch would need to find a replacement fund to cover the revenue losses.

This, in summary, is the position of the Department of Economy, Planning, and Development (DEPDev) headed by Economy Secretary Arsenio Balisacan.

“Of course, that would increase the purchasing power of workers, especially the lower-income groups,” Secretary Balisacan said last Thursday.

He stressed that replacement revenue will be needed for key spending items like infrastructure, schools, hospitals, and government services.

“If you remove those taxes, how are you going to support those important critical projects that are especially needed by the poor and low-income groups?” he said.

“We have always urged Congress that if they have to remove a tax, they will have to find a way to generate replacement (revenue),” he added.

He said however that he favors reducing the tax burden on the poor and the middle class.

“But we have to find a replacement for very much-needed tax revenue and unless you are able to do that, what you remove might actually hurt the very group that you are trying to help,” he said.

“The thrust of the Marcos administration is to bring services as close to the people as possible, which means spending more for quality services. And so we are sensitive to that,” he added.