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Another bill filed in House seeking to lower income tax

By: - Reporter / @cynchdbINQ
/ 06:03 AM June 01, 2014

House of Representatives. INQUIRER.net FILE PHOTO

MANILA, Philippines—Another bill seeking to lower the income tax rate for middle-class employees from 32 percent to 15 percent  has been filed in the House of Representatives.

House Bill No. 4372, filed by Cebu City Rep. Rodrigo Abellanosa, is the third income tax rate reduction measure that seeks to increase the take-home pay of individuals.

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Abellanosa said the bill would help workers cope with the higher cost of living and make local employment more attractive.

“Higher take home pay for income earners will ease some of the burden of our people and diminish the need to look for employment outside the country,” said Abellanosa, vice chair of the committee on small business and entrepreneurship development.

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Abellanosa proposed that the tax rates for those earning P20,000 to P70,000 be lowered from the present 32 percent to 15 percent beginning  Jan. 1, 2015, then 13 percent beginning Jan. 1, 2016, and 10 percent starting Jan. 1, 2017.

Migration of skilled labor

He said that for many years, the country had been experiencing the migration of skilled labor looking for better-paying employment abroad.

“As movements to increase salary levels have shown to be minimally productive because of the opposition primarily of the private sector, it is necessary that the government seeks other ways of making our countrymen’s lives easier, thus making local employment more attractive,” Abellanosa said.

The new bill is pending in the committee on ways and means chaired by Marikina Rep. Miro Quimbo. It seeks to amend further Section 24 (A) (2) of the National Internal Revenue Code of 1997, as amended, by reducing the income tax rates.

In March this year, Deputy Majority Leader and Valenzuela City Rep. Magtanggol Gunigundo filed HB 4099 which seeks to lower individual and corporate income tax rates to 15 percent  and 30 percent, respectively, from the current 32 percent.

Higher levels of compliance

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The proposal, Gunigundo said, would definitely reduce the number of Filipinos who do not pay taxes as lower taxes would mean higher levels of compliance.

According to Gunigundo, having a 15-percent income tax rate would stimulate the economy by providing individual taxpayers with more after-tax income or disposable income which they could either save or spend for services or the purchase of goods that are subject to the value-added tax (VAT).

The following month, Quezon Rep. Angelina Tan filed HB 4278 seeking to reduce the income tax rate of individuals to 15 percent so that the country may fully benefit from the Association of Southeast Asian Nations (Asean) integration in 2015, and help the local workforce cope with inflation and the higher costs of living.

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TAGS: Cebu City, House bill, House of Representatives, Income Tax, Income Tax Reduction, Magtanggol Gunigundo, Miro Quimbo, Rodrigo Abellanosa
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