By Marvin Sy (The Philippine Star) |
Updated July 9, 2016 - 12:00am
“To ease the burden of our Filipino
workers, and for our country to be at par with regional standards and to make
the Philippine workforce more competitive with its neighbors, this bill seeks
to amend the Tax Code by adjusting the individual income tax brackets and
reducing the rates of individual income tax,” Villar said. MONG PINTOLO
MANILA, Philippines - After proposals to
bring down the income tax rate for wage earners failed to get the backing of
the Aquino administration, Sen. Cynthia Villar is hoping President Duterte will
be more open to the idea for the benefit of millions of employees.
Villar has filed Senate Bill 147, which
seeks to amend Section 24 of the National Internal Revenue Code of 1997 or Tax
Code.
“To ease the burden of our Filipino workers,
and for our country to be at par with regional standards and to make the
Philippine workforce more competitive with its neighbors, this bill seeks to
amend the Tax Code by adjusting the individual income tax brackets and reducing
the rates of individual income tax,” Villar said.
For individuals who earn no more than
P20,000 annually, Villar’s proposal is to impose an income tax rate of five
percent.
Under the present system, individuals
who earn no more than P10,000 a year are taxed five percent by the Bureau of
Internal Revenue.
For individuals who earn over P20,000,
but not over P60,000, Villar is proposing a tax of P1,000 plus 10 percent of
the excess over P20,000.
If the annual compensation is over
P60,000, but not over P140,000, the proposed rate is P5,000 plus 15 percent of
the excess over P60,000.
For those who earn over P140,000, but
not over P280,000, the proposed rate would be P17,000 plus 20 percent of the
excess over P140,000.
If an individual earns over P280,000,
but not over P500,000, the proposed rate would be P45,000 plus 25 percent of
the excess over P280,000.
Wages over P500,000, but not over P1
million would be taxed P100,000 plus 30 percent of the excess over P500,000.
Individuals who earn over P1 million annually
would be taxed P250,000 plus 32 percent of the excess over P1 million.
Villar noted that an analysis of tax
policies of the countries comprising the Association of Southeast Asian Nations
(ASEAN) shows that the Philippines has one of the highest average tax rate
behind only Vietnam and Thailand.
“Those earning just a little over P500,000 pay
the same income tax rate at 32 percent as those earning in the millions. The
injustice in the present tax system is apparent and should be immediately
addressed,” Villar said.
Villar said the country’s tax policy
should follow the lead of richer neighbors in the ASEAN that allows more
disposable cash or purchasing power to be left in the hands of taxpayers to
enable them to have a good quality of life and provide for their families.
Meanwhile, Sen. Bam Aquino has pushed
for a measure that provides small businesses with lower income tax rate,
value-added tax (VAT) exemption and other privileges to further stimulate
economic growth.
Under Aquino’s Senate Bill 169 or the
Small Business Tax Reform Act, all small businesses will be exempt from payment
of income tax for the first three years of and will be subjected to lower
income tax rates thereafter.
As defined in the bill, small businesses
are micro and small enterprises with annual gross revenue not exceeding
P50.000.
“This bill also proposes the lowering of
the income tax rate for MSEs and an exemption from VAT, among other methods of
stimulating growth in MSEs as opposed to hindering it,” Aquino said.
The measure also pushes for simpler
bookkeeping, a special lane and assistance desk for MSEs, exemption from tax
audit, annual filing of returns, and payment in installment.
Sen. Loren Legarda also filed priority
bills that she said promotes inclusive growth and social justice.
“To be able to give everyone equal and
equitable opportunities for growth, we need to address not only the concerns of
Filipinos in general, but even more so those of our senior citizens, war
veterans, persons with disabilities (PWDs), solo parents and others who have
special needs that make it more challenging for them to be part of nation
building,” Lozada said.
Among the bills she filed are the
proposed Amendment to the Solo Parents Welfare Act, which aims to help lessen
the financial burden carried by solo parents by affording them additional
benefits, such as discounts from purchases for their children’s basic
needs. — With Paolo Romero
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