MANILA - The Bureau of Internal Revenue has issued a new table on compensation for withholding tax, which reflects adjustments under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
President Rodrigo Duterte approved the law last week lowering personal income taxes while raising duties on fuel, cars, coal and sugar-sweetened drinks. Revenues will help fund the President's P8-trillion infrastructure program.
BIR, in a memo dated December 28, 2017, ordered employers to "deduct and withhold from such compensation a tax determined in accordance with the revised withholding tax table" starting January 1, 2018.
It is "imperative that a smooth transition as to withholding tax rates is ensured" as TRAIN takes effect, the revenue agency added.
Under the new law, the first P250,000 in annual income will be exempt from tax.
The tax exemption cap on 13th month pay was also raised to P90,000 from P82,000. - with a report from Alvin Elchico, ABS-CBN News