Nelson Morales

People file income tax documents with BIR representatives at the Bureau of Internal Revenue (BIR) Tax Filing center at the Fisher Mall in Quezon City, April 16, 2018. Jonathan Cellona, ABS-CBN News

Article (news)

House tax panel OKs P350K tax exemption, relief for small businesses

Vivienne Gulla

Arthur Fuentes

ABS-CBN News

MANILA — The House tax panel on Monday approved a tax relief package aimed at raising the income tax exemption for workers and shielding micro-businesses from corporate levies.The House Committee on Ways and Means passed a measure increasing the annual taxable income exemption ceiling to P350,000 from the current P250,000, a move intended to boost the take-home pay of low- and middle-income earners.The committee approved House Bill 10345 filed by House Speaker Faustino “Bojie” Dy III and Presidential Son, House Majority Leader Sandro Marcos, which sets the following tax rates beginning January 1, 2027 onwards:<ul style="margin-left:20px;list-style-type:disc"><li>Not over P350,000 – 0%</li><li>Over P350,000 but not over P400,000 – 15% of the excess over P350,000</li><li>Over P400,000 but not over P800,000 – P22,500 + 20% of the excess over P400,000</li><li>Over P800,000 but not over P2,000,000 – P102,500 + 25% of the excess over P800,000</li><li>Over P2,000,000 but not over P8,000,000 – P402,500 + 30% of the excess over P2,000,000</li><li>Over P8,000,000 – P2,202,500 + 35% of the excess over P8,000,000</li></ul><div> </div>Committee chair Miro Quimbo said the reforms are designed to help families cope with the rising cost of living and allow small enterprises to reinvest and preserve jobs.Quimbo said that while there were proposals for higher tax ceilings, like P600,000 and P1 million, these would have severely impacted the government’s revenue collection.“So binabalanse natin ito na hindi naman at the cost of ‘yung mga mahihirap na nakikinabang sa government programs,” he said.The Department of Finance estimates that the revenue loss from House Bill 10345, if enacted and implemented, will hit an average of P68.6 billion annually from 2027 to 2030.The panel also approved a bill exempting micro-enterprises from the two percent minimum corporate income tax.“Ibig sabihin, magbabayad lang sila kung mayroon silang kinita. Kung wala silang kinita, wala silang babayaran. Currently today, nagbabayad pa rin sila kahit sila ay lugi, kaya maraming nadidiscourage o nagsasara. ‘Yun ang ayaw natin mangyari dahil ito nga ay regressive o ito ay hindi fair,” Quimbo explained.<div>NEW TAXES</div>The House panel will tackle on Tuesday a proposal to increase taxes on e-cigarettes— one of the measures eyed to offset losses from the tax relief proposals. Other measures proposed by the DOF are increasing the tax on sweetened beverages, and taxing flexible plastics like sachets.ACT Teachers Party List Representative Antonio Tinio criticized these proposed revenue-generating proposals. “Bigay-bawi. Pero ‘yung bawi rito, kasama rito ang maralita sa babawian,” Tinio said.“These taxes are related to what we call sin products. These are not basic commodities. And the consumption of these products… pwede itong maging rason para ikamatay ng consumers,” Adriano replied.Tinio is, instead, pushing for higher taxes on corporations and individuals earning billions and trillions of pesos. The DOF’s ProGRESS tax reform package has a “wealth tax” component, which proposes a 75 percent tax on automobiles worth at least P8 million, higher than the current 50 percent. It also pushes to increase the tax on aircraft, yachts/vessels for private use, as well as jewelry and perfume from 20 percent to 25 percent. The measures, introduced by top congressional leaders, may be consolidated into a broader omnibus tax reform package.Quimbo targets to get the bill approved by the lower chamber before Congress goes on break this October.President Ferdinand Marcos Jr. called for higher tax exemptions for workers as well as small businesses during his last State of the Nation Address.

The House Committee on Ways and Means passed a measure increasing the tax income exemption ceiling to P350,000 from the current P250,000.

The House Committee on Ways and Means passed a measure increasing the tax income exemption ceiling to P350,000 from the current P250,000.