5% tax on income of not over P20,500 pushed
LAWMAKER at the House of Representatives is proposing a five-percent tax on an individual’s income of not over P20,500.
Antique Rep. Paolo Javier, in a statement on Wednesday, said his proposal is contained in House Bill 6120.
Javier said individual income taxpayers in the Philippines “have lamentably suffered” due to the rising inflation rates.
Considering this “unfair situation,” he said it is timey that individual income taxation be fixed to make “more equitable.”
Javier said this was what Congress truly intended when the National Internal Revenue Code (NIRC) of 1997 was implemented.
He said that since the effectivity of NIRC in 1998, “individual income tax rates have remained based on the 1998 Consumer Price Index (CPI) of 67.8 percent which is less than half compared to the current CPI of about P141 percent, as of August 2015.”
“This means that a working man’s monthly pay of P10,000 back in 1998 is now equivalent to P20,500, which should just be entirely taxed at the rate of five percent instead of a higher rate,” Javier said.
He said the tax on an individual salary should be P1,025 and not P1,550, giving the individual with an additional monthly take home pay of P525 or P6,300 on a yearly basis.
“This amount would undeniably help in keeping every ordinary Filipino family weather the current challenges it faces financially,” he said.
The bill also states “that not later than three years after the effectivity of the Act, and every three years thereafter, each net taxable income level and normal tax rate herein stated shall be adjusted to its present value using the Consumer Price Index as published by the National Statistics Office.”
Javier said the bill is now pending at the House committee on ways and means.
