The Tax Management Association of the Philippines (TMAP) has proposed to Congress a revised income tax table for individual taxpayers which will exempt those earning less than P300,000 from income tax.
Under the TMAP’s proposal to the Committee of Ways and Means of the Senate and the House of Representatives, individual taxpayers with a taxable income of not over P300,000 shall be exempt from income tax.
The maximum tax rate for individual taxpayers was proposed to be reduced from 32 percent at present to only 30 percent, and the tax base on which such maximum rate shall be imposed was proposed to be increased to a taxable income of over P2.5 million.
Under TMAP’s proposal, a tax base of over P2.5 million shall be imposed a fixed tax of P495,000 plus an additional tax of 30 percent for income in excess of P2.5 million.
Those earning over P300,000 but less than P500,000 per year shall only be imposed a tax of 10 percent only for their income that is in excess of P300,000.
Those earning P500,000 but less than P1 million shall be imposed a fixed tax of P20,000 plus an additional tax of 20 percent on income in excess of P500,000.
Those earning over P1 million but not over P2.5 million shall be imposed a fixed tax of P120,000 plus an additional tax of 25 percent on income in excess of P1 million.
TMAP said its proposed tax table is simplified, and yet progressive, and that the proposed lower income tax rates will make Filipino workers competitive, in view of the work force mobility that is expected once the economic integration of the Asean starts in 2016.
Earlier TMAP pointed out that the Philippines’s middle income workers, or those earning P500,000 per year are the most taxed among all middle income workers in the Asean at a high rate of 32 percent.