MANILA, July 11 – Sen. Cynthia Villar filed a bill that seeks to adjust the income brackets of tax imposed on taxable income of Filipino workers.
“To ease the burden of our Filipino workers, and for our country to be at par with regional standards and to make the Philippine workforce more competitive with its neighbors, this bill seeks to amend the Tax Code by adjusting the individual income tax brackets and reducing the rates of individual income tax,” Villar said.
Villar said this is the perfect time to pass a law reducing taxes after more than a decade without much necessary amendment to the Tax Code.
Senate Bill 147 seeks to amend Section 24 of the National Internal Revenue Code of 1997, as amended.
Villar proposed to adjust the rate of tax on taxable income so that individuals earning not more than P20,000 will have 5% tax rate beginning January 1, 2016. Further, the bill seeks to adjust the tax bracket as follows:
Taxable Income
Not over P20,000 5%
Over P20,000 but not over P60,000 P1,000 + 10% of the excess over P20,000
Over P60,000 but not over P140,000 P5,000 + 15% of the excess over P60,000
Over P140,000 but not over P280,000 P17,000 + 20% of the excess over P140,000
Over P280,000 but not over P500,000 P45,000 + 25% of the excess over P280,000
Over P500,000 but not over P1,000,000 P100,000 + 30% of the excess over P500,000
Over P1,000,000P250,000 + 32% of excess over P1,000,000
At present, tax rates are computed as follows: Not over P10,000– 5%; Over P10,000 but not over P30,000– P500 + 10% of the excess over P10,000; Over P30,000 but not over P70,000–P2,500 + 15% of the excess over P30,000; Over P70,000 but not over P140,000–P8,500 + 20% of the excess over P70,000; Over P140,000 but not over P250,000–P22,500 + 25% of the excess over P140,00; Over P250,000 but not over P500,000–P50,000 + 30% of the excess over P250,000; and Over P500,000–P125,000 + 32% of the excess over P500,000.
Villar noted that an analysis of tax policies of the countries comprising the Association of Southeast Asian Nations (ASEAN) shows that the Philippines has one of the highest average tax rate, following Vietnam and Thailand.
“Those earning just a little over P500,000 pay the same income tax rate at 32% as those earning in the millions. The injustice in the present tax sysrem is apparent and should be immediately addressed,” Villar stressed. (Senate)
