QUEZON CITY, Sep. 11 — Workers earning less than P180,000 annually would no longer have to pay income tax once the House Bill reducing individual and personal income taxes becomes a law.
The House of Representatives Committee on Ways and Means’ Technical Working Group is now finalizing the consolidated version of the bill after 11 public hearings.
Committee Vice-Chair Sharon S. Garin explains that the bill is meant to increase the take-home pay of employees in order to boost their purchasing power which would translate to economic growth.
“If the government can’t push for higher wages, the next sensible thing to do is to decrease the taxes imposed against our workers. Those who earn less should be met with lower taxes. The taxes paid by the millionaires and the middle-class cannot be the same. That is what social justice demands,” Rep. Garin, a lawyer and a Certified Public Accountant by profession, said.
The draft bill indicates that there would be four tax brackets. In the first bracket, workers earning less than P180,000 a year would be exempted from paying income taxes. In the second bracket, workers who earn P180,000 to P500,000 annually would pay a tax rate of 9%.
Meantime, those who earn between P500,001 to P10 million a year would have a tax rate of 17 percent while those with more than P10 million of earnings would pay a 30 % income tax, in the third and fourth brackets respectively.
Lawmakers are considering reducing the corporate tax to 25% as an added incentive to businesses.
Financial experts who shared their estimation during the committee hearings said the government would lose at least P30 billion during its first year of implementation; however, they predict an increase in tax collection due to higher compliance rate among individuals and corporations.
If passed into a law, this would be the second deemed “pro-worker” tax legislation to happen this year.
In February 2015, President Aquino signed Republic Act 10653 that revises Section 32 (B) of the National Internal Revenue Code of 1997 raising the tax cap for the 13th month pay and other benefits from P30,000 to P82,000.
Rep. Garin said the House Committee on Ways and Means is set to approve the bill being crafted by the TWG despite opposition from the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR). (from PIA)
