Quimbo seeks to adjust income tax rates
MANILA, Philippines – House ways and means committee chairman and Marikina Rep. Miro Quimbo has filed a bill seeking to restructure the income tax bracket of income earners.
Instead of lowering the income tax rate as proposed by Senate ways and means committee chairman Sonny Angara, Quimbo wants to increase the threshold of those who will be paying the maximum 32 percent income tax rate.
Under Qumbo’s bill, only those who earn more than P1 million annually will be taxed 32 percent.
According to Quimbo, it's unfair for a middle manager who earns around P50,000 per month to pay 32 percent while his company president who probably earns double or triple his salary also pays the same 32 percent income tax.
Quimbo said that in his bill, those who earn up to P500,000 annually net of exemptions will be taxed 25 percent while those earning more than P500,000 up to P1,000,000 will have to pay 30 percent income tax.
Under the lawmaker’s proposal, the current brackets of income taxation will also be revised such that the working class will benefit from lower tax.
For instance, an entry level public school teacher who earns P18,000 a month and pays an annual income tax of P43,000 will have to only pay P33,000 income tax or a difference of P10,000.
Quimbo said the Bureau of Internal Revenue has no basis to complain since the tax rate is not reduced but only restructured for equity and fairness.
13th month pay
Quimbo's other proposal, which is currently undergoing technical review, is to increase the taxable threshold of 13th month pay.
Under the current law, only up to P30,000 of an employee's 13th month pay is exempted from taxes.
Under Quimbo's proposal, the exemption will be increased to P70,000, meaning taxes will only be implemented in excess of P70,000.