A large number of Filipino families are having difficulty achieving a higher standard of living because way too much money – up to 35 percent – is being taken out of their pockets by government through taxes, independent senatorial candidate Juan Miguel Zubiri said Thursday.
“Many families want to take out a loan so they can buy a new home or a car, especially now that interest rates are depressed. Despite availability of cheap credit, they are discouraged because they have insufficient disposable income. They are short of cash, after taxes,” Zubiri said.
Zubiri said middle class families are reeling from “excessive taxation.”
“For instance, a husband and wife with a combined annual taxable income of P600,000, actually end up paying P157,000, or 26 percent, in withholding taxes. This leaves them a take home pay of only P443,000 yearly, or P36,916 monthly,” he said.
When the family spends the P443,000, net of withholding tax, to pay for groceries, electricity, water, Internet and other purchases, they shell out another 12 percent, or P53,160, in value-added taxes (VAT), Zubiri said.
Thus, out of the couple’s P600,000 annual earnings, up to 35 percent – P157,000 in withholding taxes plus P53,160 in VAT – effectively goes to government, leaving the family a considerably shrunken disposable income of just P389,840, Zubiri said.
“Owing to their limited cash after taxes, many middle class families hesitate to buy new durable goods such as home appliances, while others have to postpone home repairs,” Zubiri said.
“If we are to produce more jobs and grow the economy at a faster rate in the years ahead, we have to give middle class families greater disposable income to encourage them to spend. We have to cut withholding taxes,” he added.
Zubiri vowed to push for individual income tax cuts that would give back to middle class families up to P250 billion of their earnings now withheld as taxes.
“A strong middle class with superior buying power has become absolutely imperative for us to drive consumption spending, increase the demand for goods and services, expand industries and create new jobs,” he pointed out.
A study by the National Economic Development Authority has shown that 62 percent of Filipinos want to own a car and 61 percent want a medium-sized home.
The study also revealed that 73 percent of Filipinos want to earn enough from their jobs; 73 percent want all of their children to be college-educated; and 30 percent want to be business owners.
Meanwhile, 30 percent of Filipinos want to unwind with family and friends while 21 percent want to be able to take trips around the country once in a while.
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About Juan Miguel ‘Migz’ F. Zubiri
Juan Miguel ‘Migz’ Zubiri, 48, served as a member of the Senate for four years, and as a member of the House of Representatives for nine years, representing the third congressional district of Bukidnon. He posted perfect attendance records in Senate and House sessions. He also earned the reputation as the “first in, last out senator” — the first to report to work and the last to leave work most days.
As Senate Majority Leader, Zubiri oversaw and managed the legislative business of the Senate. During Zubiri’s tenure as Majority Leader, the Senate passed more than 650 bills, many of which have helped to create badly needed jobs.
Zubiri is author of the Cooperative Code, the Renewable Energy Act, the Biofuels Act, the Wildlife Resources Conservation and Protection Act, the Magna Carta for Homeowners and Homeowners’ Associations Act, among other laws.
Zubiri is married to newspaper lifestyle columnist Audrey Tan-Zubiri. They have three children.