The Honorable Speaker
and Members of the House of Representatives
House of Representatives
Ladies and Gentlemen:
Pursuant to Section 27 (1) and (2), Article VI of the Constitution, I am exercising my veto power on Section 4 of the consolidated enrolled bill H. No. 6017/S. No. 36502, entitled
âAN ACT REDUCING THE TAXES ON LIFE INSURANCE POLICIES AMMENDING FOR THIS PURPOSE. SECTION 123 AND 183 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED,â
for being violative of Section 2B (1), Article VI of the Constitution which provides: âThe reule of taxation shall be uniform and equitable. The Congress shall evolve a progressive reul of taxation.â Exempting life insurance premiums form tax, as the subject Section 4 provides, will result in inequity since other similar financial instruments will continue to be taxable. It may even set a precedent for other players in the financial sector to clamor for the same treatment that will further put to risk government revenues.
Further, exempting life insurance premiums from tax will only benefit the life insurance providers. Furthermore, it will deprive government of revenues that can be spent on services that benefit most the poor, not to mention that insurance is consumed more by the middle to high-income earners.
In view thereof, I affix my signature on the above-mentioned revenue measure with notation that Section 4 thereof be deleted.
(Sgd.) GLORIA MACAPAGAL-ARROYO