MANILA - Ninety-nine percent of Filipino workers will see an increase in their take-home pays from next year due to lower income tax rates under President Rodrigo Duterte's reform initiative.
An estimated 7 million will be exempt from paying income taxes after the ceiling on annual income was set at P250,000. However, exemptions for dependents from the old system were removed.
The cap on 13th month pay that is tax exempt was also raised to P90,000 from P82,000, giving Filipinos more money to spend during the Christmas holidays.
The ABS-CBN Investigative and Research Group prepared a calculator to help determine by how much taxpayers' take-home pays will change under the new system.
Duterte promised lower income tax rates during the campaign to provide relief to the middle class and shift the burden to the ultra-rich. He signed the first package of reforms on Dec. 19.
Income tax rates for those earning more than P250,000 per year were set at a range of 20 percent to 35 percent for those whose annual income exceed P8 million.
The rates will be reduced further in 2023.