The Tax Management Association of the Philippines Inc. (TMAP) is confident that Congress will pass within the year the proposed reforms in the country’s personal income-tax system.
In a briefing on Friday, TMAP President Terence Conrad H. Bello said lawmakers are now working hard to study possible enhancements in the law in a bid to increase compliance, which is more beneficial to both the government and the public.
”I think Congress will pass bills on personal income tax [reforms] within the year,” he said.
TMAP has been proposing changes in the country’s tax system to address loopholes and make it more competitive vis-à-vis the looming regional integration.
In its proposal to Congress, the group suggested for a “simplified yet progressive income-tax table” and an adjusted tax base to address “bracket creep” phenomenon. It suggested that working individuals with an annual tax base of P300,000 and below will not be taxed.
For those with tax base of over P300,000 up to P500,000, tax rate should be 10 percent; for those with tax base of not over P1 million, 20 percent; 25 percent for those with tax base of P1 million to P2.5 million; and 30 percent for those with tax base of P2.5 million. TMAP also proposed for the reduction in the individual income-tax ceiling from 32 percent to 30 percent, same as the corporate tax.
Similarly, the group has also proposed for the enhancement in the country’s corporate income tax, but Bello admitted that this will take a longer process compared to the individual income tax.
Also, TMAP has submitted a proposal for the amendment of the Tax Code and Bello said Party-list Rep. Neri Colmenares of Bayan Muna has authored a proposed bill, House Bill 5401, supporting this move.
Bello said any enhancement in the country’s tax system is beneficial not only to the government, the people and corporations, but the country as a whole.
He said investors have raised some issues about the country’s tax system vis-à-vis the tax rules and regulations in other countries.
”It could be a factor in over competitiveness,” he said.