Passage of bill lowering income tax rates moved to end-2015

The House Ways and Means committee chair has moved the timeline for approving a comprehensive tax reform measure lowering income tax rates to late 2015 from June 11, citing the need for corresponding revenue-generating measures to first be in place.

 

Marikina City Rep. Romero Quimbo said some of the revenue-generating measures his panel plans to pass in the coming months include raising the excise tax on oil, as well as the fiscal incentives rationalization bill and the proposed Tax Incentives Management Act (TIMTA).

 

Progress involving these bills in the legislative mill has stalled following the Mamasapano debacle the compelled Congress to focus on investigating the incident.

 

Nevertheless, Quimbo assured the measure seeking to lower income taxes “will be approved in late 2015.”

 

At least 13 proposals to lower individual and corporate income tax rates by as much as 15 percent are pending at the House committee’s technical working group. At 32 percent the Philippines has the highest income tax rate among Southeast Asian countries.

 

CPI-based tax base

 

One of the measures filed by Quimbo is House Bill 4829, proposing the adjustment of the top tax base from P500,000 to P1.4 Million based on the Consumer Price Index (CPI) and indexing other tax brackets to inflation. Workers earning P180,000 and below are completely tax exempt under the proposal.

 

A flat rate of 25 percent income tax will be imposed on self-employed individuals and professionals while a 5 percent minimum income tax rate will be foisted on self-employed individuals and professionals.

 

Imposing a 25 percent income tax rate on self-employed individuals and professionals – in essence according them full treatment as corporations – is advantageous to both parties, Quimbo said in the bill’s explanatory note.

 

According to the lawmaker, public school teachers and soldiers stand to save some P24,000 in taxes once the bill adjusting income tax rates is passed into law.

 

“People are earning wages equivalent to that in 1998 but they are paying tax rates of present. This has to be changed,” Quimbo said. – VS, GMA News