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Philippines Tables Comprehensive Tax Reform Law

by Mary Swire, Tax-News.com, Hong Kong

03 May 2017


Legislation recently tabled in the Philippines would expand a number of income tax-exempt allowances.

As part of comprehensive reforms contained in House Bill 4774, taxpayers with monthly income of up to PHP21,000 (USD419) would be exempt from personal income tax.

The legislation was developed by the House Ways and Means Committee, working in close coordination with the Department of Finance, and was filed by the Committee's head, Dakila Carlo Cua.

HB 4774 would also lower personal income tax rates and revenue-offsetting measures. It also includes exemptions on the first PHP82,000 of earnings from 13th month pay and other bonuses received by taxpayers.

"Tax rates for 99 percent of taxpayers will gradually decrease over the next few years of implementation under HB 4774," Finance Undersecretary Karl Kendrick Chua said. "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 revised package under HB 4774 additionally includes lower rates for estate and donor's taxes, adjustments to automobile and fuel excise taxes, and expansion of the value-added tax (VAT) base, while retaining the exemptions enjoyed by senior citizens citizens and persons with disabilities.

The bill also proposes the introduction of a sugar-sweetened beverage tax, indexing the motor vehicle user's charge to inflation, and granting an amnesty in past estate tax disputes.

The estate tax, which is a tax imposed on the transfer of ownership of properties upon the death of the owner, will also be reduced from the current maximum rate of 20 percent to 6 percent.

TAGS: individuals | tax | value added tax (VAT) | Philippines | legislation | tax rates | individual income tax

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