Project

In
Economics
Submitted by:
Alec Ricardo

Submitted to:
Mr. Albert Ilarina
 Philippine Taxation System

National Internal Revenue Code of 1997 Tax Reform Acceleration and Inclusion

 Power of the Commissioner to obtain information, and to summon,
examine and take testimony of persons
 The Commissioner has the authority to determine fair market value of
real properties.
 Provides for the authority of the Commissioner to obtain information
from national and local governments, government agencies and
instrumentalities
 Power of the Commissioner to make assessments and prescribe
additional requirements for tax administration and enforcement
 Taxable income of individuals are subject to the given graduated rates
 Around eighty percent (80%) of tax revenues derived from individual
taxpayers is collected from the wage earners or salaried taxpayers. Only
twenty percent (20%) is collected from self-employed individuals and
professionals. In terms of tax paid on gross income, the effective tax rate
for wage earners is 15.25%, thus a wage earner receiving a gross income
of P200,000 pays a tax of P30,500 while a self-employed individual or
professional who has a gross income of P200,000 pays only P2,280 or a
measly 1.14% effective tax rate.
 This bill seeks to provide a uniform and equitable taxation by limiting
the allowable deductions for self-employed individual or professional to
address the imbalance of taxation between wage earners and self-
employed individuals or professionals. The bill also proposes to grant
self-employed individuals and professionals an optional standard
deduction of forty percent (40%) of gross income. In addition to the
limit on allowable deductions and optional standard. deduction, this bill
also defines "self-employed individuals" and "professionals".

 The Cooperative Development Authority shall submit a report on tax
incentives availed by cooperatives to the BIR and DOF.
 The amendment provides for revised personal income tax brackets
 Mandatory consultation with both private and public competent
appraisers before division of the Philippines into zones
 Prior notice to affected taxpayers before the determination of fair market
values of the real properties
 Publication or posting of adjustments in zonal value in a newspaper of
general circulation in the province, city or municipality concerned.
 The basis of valuation and records of consultation shall be public records
open to the inquiry of any taxpayer.
 Zonal valuations shall be automatically adjusted once every three years.
 streamlined the income tax brackets and reduced the brackets to six (6);
 adjusted upwards the taxable income threshold per bracket;
 revised the tax rate charged on each taxable income bracket;
 raised the annual gross income eligible for tax exemption; and
 removed the personal exemption (P50,000) and additional exemptions
(maximum of P100,000 if taxpayer has four dependents)