THE Bureau of Internal Revenue (BIR) has thrown its support behind President Ferdinand Marcos Jr.’s tax reform agenda, saying it is ready to carry out the proposed measures once Congress passes them into law.
In a statement on Thursday, Tax Commissioner Charlito Martin Mendoza said the bureau stands ready to implement whatever measures Congress enacts.
Among the measures Marcos wants is raising the annual income tax exemption threshold from P250,000 to P350,000. The Department of Finance estimates this would benefit around 3 million taxpayers, though it would also mean about P60 billion in foregone revenue each year.
Mendoza said the goal is to roll out tax relief efficiently, encourage more people to comply voluntarily and keep revenues flowing to fund public services. He added that the bureau’s task now is to prepare fully for the new measures while continuing to strengthen tax administration and improve the taxpayer experience.
While the proposed measures are still pending in Congress, Mendoza said the BIR will keep pursuing reforms already within its own authority — including simplifying compliance, improving services, modernizing its digital systems, and reviewing outdated processes and regulations.
He also said the bureau plans to consult more closely with taxpayers and other stakeholders going forward, saying future reforms should be shaped by what taxpayers actually experience and need.
These efforts should help smooth the rollout of the government’s planned tax relief, encourage voluntary compliance and help sustain the revenue needed for public services.
Sin taxes
Meanwhile, House Committee on Ways and Means Chairman and Marikina Rep. Miro Quimbo said on Tuesday that the revenue expected to be lost from the proposed worker tax relief could be fully offset by raising taxes on certain products.
Quimbo said the House is prioritizing higher taxes on vapes, heated tobacco products and sugar-sweetened beverages to help curb health problems linked to these products.
He added that lawmakers are also weighing broader taxes on single-use plastics, particularly sachets, to cut down on plastic pollution and prevent flooding caused by clogged waterways.
But Institute for Policy Evaluation founder and director Ashok Kaul told reporters on Thursday that sin taxes are meant to discourage consumption, not to plug revenue gaps.
“It’s not wise to rely on the revenue from sin taxes. You design sin taxes for a different reason,” Kaul said, adding that a decline in sin tax revenue over time is actually the point, since it means people are cutting back on harmful behavior.
