In the Philippines, there are two types of income tax—individual and corporate tax. An individual income tax rate is about 5-32% while the corporate tax rate stands at 30%, according to Thailand’s ASEAN report on the taxes of the Philippines.
Filipinos are individually taxed up to 32% of their income. This applies to all residents, while non-residents or those who were not born in the country are only taxed based on their earnings made here.
According to the report, Filipinos earning below 10,000 pesos per month are not subjected to remit any taxes.
However, those receiving 10,000-30,000 pesos monthly are subjected to remit 10% of their earnings to the government. These rates apply to workers who earn from businesses or those who earn from practicing their professions.
In a report released by GMA News Online, Filipinos earning 21,000 a month don’t need to remit their personal income tax further. This is due to the first package of the Comprehensive Tax Reform Plan (CTRP) made by the Department of Finance (DOF).
According to them, the bill is already pending within the House of the Representatives. DOF Undersecretary Karl Kendrick Chua stated that the tax exemption will give Filipinos earning less than 21,000 per month the opportunity to have a 20,000 pesos yearly savings.
In an interview, Chua said, “Tax rates for 99 percent of taxpayers will gradually decrease over the next few years of implementation under HB 4774.”
DOF’s revised CTRP Package One is pending under House Bill 4774 which was filed by Representative Dakila Carlo Chua.
Chua continued, “The simplified tax system will increase the take-home pay of most individuals, putting more money in people’s pockets, which they can use to save for the future or spend on their families’ needs, such as for tuition or school expenses of their children.”
The source cited that under the revised package, a call center agent who is earning 21,000 pesos a month with a gross income of 273,000 pesos (inclusive of 13 month pay and other benefits), would fall under the zero-tax bracket.
The undersecretary continued, “Under the tax reform plan, his take home pay will effectively increase by P21,867 annually because he would no longer have to pay this amount of income tax under the current system.”
Sweet! What do you think about the revised Comprehensive Tax Reform that was proposed by the DOF? Do you think you could save more of your earnings under the new bill?
