Politics

Gatchalian to prioritize simplification of tax system for MSMEs 

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SENATOR Sherwin T. Gatchalian on Tuesday said he will prioritize measures that will simplify tax procedures for micro, small and medium enterprises (MSMEs) alongside establishing a mechanism for reporting abusive government officials involved in the collection system.   

“I want to put taxpayers first as a priority in the committee, making sure that taxing is as simple as buying goods in Shopee,” the senator, who will be chairing the Ways and Means Committee in the 19th Congress, said during a speech at a Senate hearing. 

“We make sure that corruption and erring government officials are held into account,” he added.   

He said he wants to “focus on the small and thriving MSMEs sector,” which is considered as “the backbone of our economy.”  

MSMEs comprise 99.5% of business establishments in the country, 63% of the workforce, and about 40% of gross domestic product in recent years, based on data from the Department of Trade and Industry.  

Mr. Gatchalian said prioritizing MSMEs and other taxpayers while looking at accountability and efficiency require attention through oversight and not just the creation of new laws.  

OTHER TAX SOURCESRevenues can also be generated from non-essential goods and casinos, he added. 

When asked if he was open to imposing higher taxes on the country’s most affluent segment, the senator pointed to the Passive Income and Financial Intermediary Act (PIFITA), one of the bills he plans to prioritize. 

“The PIFITA will not only harmonize the different tax regimes in the different income classes, but also… increase the passive income tax levels, so to a sense it will be addressed through that bill,” he said.  

Mr. Gatchalian will also put the proposed Real Property Valuation and Assessment Reform Act in the priority list, which was part of the previous administration’s planned tax reform packages.   

The proposed measure is seen to bring in more revenues for local government units, which is in charge of collecting annual property taxes, and accelerate the rollout of infrastructure projects.  

The senator also noted that the imposition of new or higher taxes requires consideration of other factors.   

“Timing is very important in raising taxes,” he said. “It’s also very important to listen to the calls of the people.” 

He also said that he was uncomfortable suspending the discounts promised to constituents, especially at a time of heightened inflation.   

“We can all contribute to nation-building by contributing a portion of our earnings through taxes because revenues build roads, tools and other things,” said the senator. “But we also have to make sure that our customers, our taxpayers are not being abused, victimized and being treated as second class citizens.”  

He is looking to conduct oversight committee hearings within the first three months after Congress opens on July 25. — Alyssa Nicole O. Tan