Senator T. Cynthia A. Villar filed yesterday a bill that seeks to adjust the income brackets of tax imposed on taxable income of Filipino workers.
Villar said her measure, Senate Bill No. 147, was designed “to ease the burden of our Filipino workers, and for our country to be at par with regional standards and to make the Philippine workforce more competitive with its neighbors.’’
The measure seeks to amend the Tax Code by adjusting the individual income tax brackets and reducing the rates of individual income tax,” she said.
Villar said this is the perfect time to pass a law reducing taxes after more than a decade without much necessary amendment to the Tax Code.
She noted that an analysis of tax policies of the countries comprising the Association of Southeast Asian Nations (Asean) shows that the Philippines has one of the highest average tax rate, following Vietnam and Thailand.
“Those earning just a little over P500,000 pay the same income tax rate at 32 percent as those earning in the millions. This injustice in the present tax system is apparent and should be immediately addressed,’’ she explained.
The Philippine tax policy should follow the lead of richer neighbors in the Asean that allows more disposable cash or purchasing power to be left in the hands of taxpayers to enable them to have a good quality of life and provide for their families, she said.
The Villar bill seeks to amend Section 24 of the National Internal Revenue Code of 1997, as amended.
Villar proposed to adjust the rate of tax on taxable income so that individuals earning not more than P20,000 will have five tax rate beginning January 1, 2016.
The bill seeks to adjust the tax bracket as follows:
Those over P20,000 but not over P60,000, P1,000 plus 10 percent of the excess over P20,000.
Over P60,000 but not over P140,000, P5,000 plus 15 percent of the excess over P60,000.
Over P140,000 but not over P280,000, P17,000 plus 20 percent of the excess over P140,000. (Marico B. Casayuran)