Reuters file photo
Marikina Rep. Miro Quimbo has refiled his proposal in the 17th Congress to lower income tax rates.
House Bill 20 seeks to adjust the individual income tax brackets to inflation and reduce the tax burden of more than six million Filipino workers.
The measure didn't pass the last Congress due to the opposition of the Department of Finance.
Quimbo's proposal wants a more simple, efficient, and equitable tax system. The Duterte administration has welcomed the proposal, and even included it in its 10-point economic agenda.
House Bill 20 proposes the indexation of tax brackets to inflation based on the Consumer Price Index (CPI).
TAXABLE INCOME BRACKETS
TAX RATE:
Not over P21,613: 5%
Over P21,613 but not over P64,839: P1,080 + 10% of excess over P21,613
Over P64,839 but not over P151,290: P5,402 + 15% of excess over P64,839
Over P151,290 but not over P302,581: P18,370 + 20% of excess over P151,290
Over P302,581 but not over P540,323: P48,628 + 25% of excess over P302,581
Over P540,323 but not over P1,080,645: P108,063 + 30% of excess over P540,323
Over P1,080,645: P270,160 + 32% of excess over P1,080,645
“While my initial proposal was to overhaul the entire income tax system, the adjustment of brackets to inflation is the most urgent step in our quest for genuine reform,” the Marikina congressman said.
Once the tax brackets have been adjusted, a Teacher I earning P241,137 per annum who now pays P14,231 in taxes will only be taxed P9,935.
The additional take home pay of P4,296 can be used to increase his family’s budget for education and savings. The savings becomes even more significant for those who have higher salaries, according to Quimbo.
The proposed measure also provides for automatic adjustment of the tax brackets to inflation every three years.
“In the current system, 6.2 million Filipino workers bear the brunt of paying the individual income tax collection of BIR. This means only 16% of our 22.2 million wage and salary workers serve as the milking cow of BIR. We cannot allow the suffering of our workers to perpetuate under our archaic and unfair tax system. We must ensure that they are able to live comfortably to provide for their families,” Quimbo said.
He also envisions tax reform in phases so as not to risk the country’s fiscal health. The other phases would include a fixed but lowered tax scheme for the self-employed and professionals as well as a reduction of corporate income tax rate to 25% to make the country competitive.