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IN THE KNOW: Tax reform bill schedule on personal income

07:26 AM December 13, 2017

Under the TRAIN schedule on personal income tax, people earning more than P250,000 but not more than P400,000 would be taxed 20 percent of the excess over P250,000 from 2018 to 2022, and 15 percent of the excess, from 2023 onward.

For those whose incomes are more than P400,000 but not more than P800,000, the tax would be fixed at P30,000 plus 25 percent of the excess over P400,000 in the period from 2018 to 2022. From 2023 onward, the tax would be P22,500 plus 20 percent of the excess.

For people earning more than P800,000 but not more than P2 million, the tax would be P130,000 plus 30 percent of the excess over P800,000 from 2018 to 2022. From 2023 onward, the tax would be P102,500 plus 25 percent of the excess.

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For those with income of more than P2 million but not more than P8 million, the tax would be set at P490,000 plus 32 percent of the excess over P2 million, from 2018 to 2022. It would be set at P402,500 plus 30 percent of the excess from 2023 onward.

For people earning more than P8 million, the tax would be P2.41 million plus 35 percent of the excess over P800,000, from 2018 to 2022. From 2023 onward, the tax would be set at P2.2025 million plus 35 percent of the excess.

In the old scheme under the 1997 Tax Code, the income ranges and schedules are different with smaller increments, with a 5-percent tax on those earning no more than P10,000; a P500 flat tax plus 10 percent of the excess for those earning P10,000 to P30,000; a P50,000 flat tax plus 30 percent of the excess for those with incomes ranging from over P250,000 to P500,000, and so on.

Under the old tax schedule, those earning more than P500,000 are levied a flat P125,000 tax plus 32 percent of the excess over P500,0000. —DJ Yap

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TAGS: personal income tax, tax reforms, Train
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