House bill pushes for lower income tax rates
MANILA, Philippines – The country’s individual wage earners may celebrate their Fridays with more money if a bill that seeks to lower the income tax rate becomes a law.
Deputy Majority Leader and Valenzuela City Representative Magtanggol Gunigundo filed House Bill 4099, which seeks to reduce individual tax rates to 15 percent from the current 32 percent.
The bill also wants to lower corporate tax rates to 15 percent from 30 percent.
The proposed measure seeks to amend Sections 24 and 27 of Republic Act 8424, or the National Internal Revenue Code.
In a press briefing on Tuesday, Gunigundo said increasing the disposable income – or the income net of taxes and other benefits – would enable consumers to buy more goods and services, and thus stimulate the economy.
The demand in consumption would also spike supply, thereby creating jobs, the lawmaker said.
A lower tax base would also encourage those from the informal economy to surface to the mainstream, Gunigundo said.
He also said Philippines has one of the highest income tax rates in Asia.
According to Gunigundo, the Philippines has the third highest income tax rate, only next to Vietnam with 35 percent and Thailand with 37 percent.
Meanwhile, the Philippines has the highest corporate income tax rate. Indonesia has a corporate tax rate of 30 percent, Malaysia and Myanmar with 25 percent, Laos with 24 percent, Vietnam with 22 percent, Cambodia, Thailand and Brunei with 20 percent, and Singapore with 17 percent.
Gunigundo said the country’s high corporate tax rate shuns away foreign investors.
The proposed measure also said individuals earning below P180,000 in gross income annually or with less than P30,000 in net taxable income be exempted from income tax.
In the tax code, only minimum wage earners are exempted from income tax.
“We want a better and brighter Philippines with lower tax rates. It will provide a robust economy, more jobs. It will broaden the tax base and make a happier and productive citizenry,” Gunigundo said.
The bill is pending before the Ways and Means Committee.
In the Senate, neophyte Senator Juan Edgardo Angara is pushing for the passage of a bill that seeks to reduce an individual’s income tax rate from the current 32 percent to 25 percent by 2017.
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