on how much a person consumes or purchases, regardless of income. Since the low-income classes have to spend more to meet their day-to day needs, then they end up paying more on consumption taxes, unlike the high-income classes, who are able to save money after meeting their needs. Indirect taxes, not just VAT, are inherently regressive because they hurt the poor more than they do the rich. This is because taxpayers, like property owners and businessmen, can simply pass on these taxes to the ordinary folk, thus they experience a loss of income and the raising of prices of goods and services. This happens because these taxpayers can add the taxes they have to pay to the prices of their goods, thus handing the burden over to the consumer. Income tax However, income tax also becomes a factor to income inequality because according to the Tax Management Association of the Philippines, Filipino workers pay the highest income tax in the entire Association of South-East Asian Nations (ASEAN) region. An average Filipino worker is taxed 32% as long as he is earning more than the minimum wage. These minimum wage earners are the only ones who are tax-exempt. Corporations are taxed less than individual earners at a tax rate of 30%. See also Economic inequality Poverty in the Philippines List of Philippine provinces by Human Development Index References External links Social issues in the Philippines Economic inequality Economy of the Philippines Philippines