Solon seeks 5% income tax for income not over P20,500
from the present P10,000 A lawmaker remains hopeful that the government can still provide tax relief to Filipinos through his new proposal seeking to impose an income tax of five percent on an individual taxpayers income not over P20, 500 from the present P10,000. Rep. Paolo S. Javier (Lone District, Antique), an Assistant Majority Leader, said his proposal aims to help every ordinary Filipino family cope with the current financial challenges by making individual income taxable more equitable. The countrys individual income taxpayers have lamentably suffered inequity on account of the tax systems inability to keep up with rising inflation rates for quite sometime. Considering this unfair situation, it is just timely that individual income taxation be fixed to make it once more equitable, which was what Congress truly intended when the NIRC of 1997 was fashioned, said Javier. Since the effectivity of the National Internal Revenue Code (NIRC) of 1997 on January 1,1998, Javier said the individual income tax rates have remained based on the 1998 Consumer Price Index (CPI) of 67.8 percent which is less than half compared to the current CPI of about P141 percent, as of August 2015. This means that a working mans monthly pay of P10,000 back in 1998 is now equivalent to P20,500, which should just be entirely taxed at the rate of five percent instead of a higher rate, said Javier. Otherwise, Javier said the tax on an a ones salary should merely be P1,025 and not P1,550, leaving him with an additional monthly take home pay of P525 or P6,300 more disposable income on a yearly basis. This amount would undeniably help in keeping every ordinary Filipino family weather the current challenges it faces financially, said Javier. In House Bill 6120, which is now pending at the House Committee on Ways and Means, the lawmaker proposed the amendment of Section 24 (A)(2) of the NIRC, as amended, pertaining to Rates of Tax on Taxable Income of Individuals. The amendment provides that the tax shall be computed in accordance with and at the rates established in the following schedule: Not over P20,500: 5% Over P20,500 but not over P61,500: P1,025 + 10% of the excess over P20,500 Over P61,500 but not over P143,500: P5,125+15% of the excess over P61,500 Over P143,500 but not over P287,000: P17,425+20% of the excess over P143,500 Over P287,000 but not over P512,500: P46,125+25% of the excess over P287,000 Over P512,5000 but not over P1,025,500: P102,500+30% of the excess over P512,500 Over P1,025,000: P256,250+32% of the excess over P1,025,000 The bill also provides that not later three years after the effectivity of the Act, and every three years thereafter, each net taxable income level and normal tax rate herein stated shall be adjusted to its present value using the Consumer Price Index as published by the National Statistics Office (NSO). (30) rbb
Institute Progressive Tax Reform and More Effective Tax Collection, Indexing Taxes To Inflation. A Tax Reform Package Will Be Submitted To Congress by September 2016