Tuesday, October 11, 2005

Yippee! Tax Credits!

I take back what I said about Senator Ralph Recto, if I ever did say anything unkind... on hindsight, I didn't really.

From this pinoy.md post, it seems that there is a light at the end of the tunnel. The government, after realizing that those who earn less than P240,000/year are the ones that religiously pay their taxes, has now thought to return part of those taxes to presumably increase consumer spending or the dismal savings rate. But that is just a conjecture on my part.

Although government may not be in the best position to implement this now, I'm not complaining. It is welcomed if only because the improved tax collection may not necessarily mean improved government service. The extra revenue may just go to the pockets of corrupt officials, a story we hear again and again.
Senator Ralph G. Recto’s version was the least costly at P14 billion, according to the tax research center. Mr. Recto, chairman of the ways and means committee, wanted to reduce the tax rates for lower income earners by 30% to increase take-home pay.
According to government data, most taxpayers belong to the lower income brackets, with 30% earning P100,000 and below annually. Only 3% to 5% of taxpayers earn P500,000 and above.

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