MANILA – The House of Representatives has begun discussions on President Rodrigo Duterte’s tax reform package, which seeks new revenue sources to offset a reduction in income taxes.
House Bill 4774 reduces the maximum income tax rate to 25 percent from 32 percent and proposes excise taxes on diesel and cars.
Effective July 1, 2017, compensation earners are exempt from tax if they are no more than P250,000 annually, according to the bill.
Those earning P250,000 but not over P400,000 will pay 20 percent of the excess over P250,000. Those earning P400,000 but not over P800,000 will pay P30,000 plus 25 percent of the excess over P400,000. Those earning P800,000 but not over P2,000,000 will pay P130,000 plus 30 percent of the excess over P800,000. Those earning above P5,000,000 will pay P1,450,000 plus 35 percent of the excess over P5,000,000.
A 20-percent tax will also be imposed on “passive income” including interest on bank deposits, royalties except on books, literary and musical works and prizes.
The bill also called for a P7 per liter excise tax from July this year on naphta regular gasoline, leaded premium gasoline and unleaded premium gasoline from P4.35, P5.35 and P4.35 respectively.
A P3 per liter excise tax will be imposed for the first time on diesel, liquefied petroleum gas and bunker fuel oil.
The duties will gradually increase to P9 for the three types of gasoline by 2018 and P10 by 2019.
Duties for diesel, LPG and bunker fuel oil will be increased to P5 by 2018 and to P6 the following year. -- with reports from RG Cruz, ABS-CBN News