A House Bill to repeal the Estate Tax
Valenzuela City Representative Magtanggol Gunigundo has filed a bill in the House of Representatives that seeks to abolish inheritance tax to help raise Filipinos incomes. At last, a congressman in our country has eased up on the plight of people who acquire assets and properties from their parents.
Congressman Gunigundo the chairman of the House Committee on Labor and Employment, is the author of House Bill 5602 which aims to repeal Title III, Chapter 1, Section 84 to 97 of Republic Act 8424, or the National Internal Revenue Code of 1997.
In an article on the House of Representative website (www.congress.gov.ph), Gunigundo said “it is high time to repeal the excise tax that unfairly punishes frugality, undermines economic growth, reduces real wages and raises little, if any revenue.”
“Consider the impact of estate tax on an entrepreneur who has struggled to build a small business into a larger enterprise, who may wonder why he should keep working so hard to grow his business if the government will take half of all the added wealth that he creates,” he said.
An estate tax is a tax on the right of the deceased person to transmit his property to his lawful heirs and beneficiaries. This, according to Gunigundo, can result in the heirs liquidating or selling family business just to be able to pay the said tax. Gunigundo said, such businesses or inheritance are often asset-rich but cash-poor.
Because of this, the effect of the estate tax damages the economy since in destroys ongoing, job-producing businesses just to be able to fund added government consumption. “The estate tax penalizes savers and investors who attain wealth, while rewarding dissipation through private and government consumption,” Gunigundo added.
With House Bill 5602, repealing the estate tax would be of great benefit to the average workers who would gain from a larger capital stock and entrepreneur’s greater job creation efforts. Let’s just hope this will be approve soon since it is still pending after it was filed last December of 2008.
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