The Ways and Means Committee headed by Sen. Juan Edgardo M. Angara, is targeting the passage of the income-tax reform bill in the Senate by December this year.
Angara was named on Tuesday as the chairman of the committee tasked to conduct hearings and marshal the bill’s quick approval as chief sponsor of the long-awaited measure that President Duterte had endorsed to Congress for early enactment into law.
Soon after Senate President Aquilino L. Pimentel III banged the gavel formalizing his nomination as new chairman of the Ways and Means Committee, Angara affirmed that approval of the income-tax reform bill is on top of the Senate panel’s priority list.
Taking the floor after assuming the post, he thanked the Senate leadership and his colleagues “for choosing me to head the Ways and Means Committee.”
“We personally requested for this committee so we can continue our work on overhauling our outdated and unjust tax system,” Angara added. “We’ve been pushing for this reform since I was elected senator in 2013, and I’m now very confident that our bill will finally see the light of day.”
Angara acknowledged President Duterte’s promise in his first State of the Nation Address (Sona) before a joint session of Congress on Monday that the administration will help push for the early enactment of a law lowering income-tax rates.
He noted that Duterte’s 10-point economic agenda included instituting progressive tax reform and more effective collection, indexing taxes to inflation.
Pointing out that the Duterte administration’s economic managers also assured submission of a tax- reform package to Congress by September, Angara said: “We are looking forward to working hand in hand with the Department of Finance to come up with a comprehensive tax- reform that will both benefit the Filipino people and the government.”
“But, definitely,” he added, “the Senate Ways and Means Committee will start conducting hearings right away on bills that seek to update and adjust our tax brackets.”
Angara said lawmakers supporting the reform measure are hoping to pass the bill indexing tax rates to inflation “by the end of the year so our taxpayers can enjoy higher take-home pay beginning next year.”
As proposed in Angara’s Senate Bill 129, workers earning below P70,000 annual taxable income or approximately P14,000 monthly gross income will be exempted from paying taxes, dissolving the first three brackets under the present tax code.
Angara also proposed that those earning P20,000 to P30,000 monthly will move to a lower bracket and will be taxed from the current 25 percent to 20 percent, saying the lower tax rates will result in higher take-home pay, with savings from tax of more than P10,000 a year.
Meanwhile, the top tax bracket will be increased from an annual taxable income of P500,000, or approximately P60,000 monthly gross income, to P1.25 million annual income, or those earning more than P100,000 a month.
“In effect, we are easing the tax burden of our workers, as most of them will be pulled back to their original tax brackets in 1997,” Angara said.
The Angara bill also provided for an automatic adjustment in the tax schedule every three years using the consumer price index so that inflation will no longer result in tax increases.
At the same time, Angara also filed Senate Bills 130 and 317, which seek to lower personal and corporate income-tax rates, respectively, to 25 percent, saying this would “make the Philippines more competitive as the country holds the highest income- tax rates in the Asean region.”
As part of his tax-reform agenda, the senator is also pushing the creation of a Taxpayer Assistance Service Office to ease the burden of Filipinos in paying taxes, and a so-called Family Tax Relief bill that “allows college tuition fees and home loans as deductions from the gross income of individuals.”