The first PHP150,000 (US$3,00) of your income would be exempted from taxes, under a proposed tax reform package pending in the Philippine Senate.
Taxpayers with children would also get an additional PHP25,000 (US$500) exemption per child for a maximum of PHP100,000, said Senator Sonny Angara, chairman of the Senate ways and means committee.
“It’s probably the most generous break given to employees in recent history,” Senator Sonny Angara, sponsor of the proposed bill, told ABS-CBN News Channel’s Headstart.
This would be particularly helpful for middle-income earners. For example, a call center agent who earns PHP16,136 (approx. US$322) a month would only need to pay PHP4,557 (US$91.14) in annual income tax instead of PHP20,576 (US$411.52), the amount they would need to pay under the current tax bracket system.
The House of Representatives’ version grants an even higher annual income tax exemption of PHP250,000 (US$5,000).
Angara told ABS-CBN that under this current bill, contractual employees have the option to pay a flat rate of 8 percent of their gross income under the Senate measure.
President Rodrigo Duterte assumed office last year with the promise to reform the tax system and ease the burden on the middle class.
One way the administration is planning to compensate for lowering income taxes is to raise taxes on fuel and sugar-sweetened beverages. These are funds the president also needs for his ambitious PHP8 trillion (US$157 billion) infrastructure program.
with reports from ABS-CBN News
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