Rep. Romero “Miro” Federico S. Quimbo. FILE PHOTO
MANILA, Philippines–The Lower House is looking at raising the tax exemption cap for workers to an all-inclusive, gross annual income of at least P150,000, according to Marikina City Rep. Romero Federico S. Quimbo.
Quimbo, chair of the House ways and means committee, told the Inquirer that they were also looking at raising the taxable income ceiling to P10 million from only P500,000 at present to align with inflation the tax brackets in place since the 1990s.
“We intend to retain the highest income tax rate of 32 percent for those earning P10 million and above a year,” Quimbo said.
At present, an annual taxable income of as low as P10,000 and less is already slapped a 5-percent tax rate, which goes up to a high of 32 percent for those earning P500,000 and above.
To ease the burden on salaried workers as well as on tax collectors, Quimbo said the substitute bill being finalized by the House ways and means committee to unify all the pending income tax reform measures would be based on gross income.
“We’re going to set aside all deductions, personal exemptions, de minimis, minimum wage … Everything will be based on gross income. It is easier to compute and easier to administer by the BIR [Bureau of Internal Revenue],” Quimbo said.
The tax brackets would also be less, or about three to four, from seven at present, he added.
As part of the overhaul and rationalization of the income tax regime, Quimbo said the Lower House was also looking at lowering to 25 percent from the current 30 percent the highest rate to be slapped on corporate income.
Congress’ income tax reform package would be deliberated upon and passed “soon,” Quimbo said, but only after the rationalization of fiscal incentives measure has been approved. “We first need a revenue-plugging measure,” he said.
Quimbo earlier said the rationalization of fiscal incentives bill as well as the proposed tax incentives management and transparency act or Timta would likely be approved by the Lower House in June before the adjournment leading to President Aquino’s State of the Nation Address or Sona.
The Marikina lawmaker had also pushed for a higher tax exemption cap on the 13th month pay and other bonuses, which Congress passed last year. In February, President Aquino signed into law Republic Act (RA) No. 10653, which raised to P82,000 from P30,000 previously the total amount of tax-exempt bonuses.
The BIR last week issued the rules implementing RA 10653 starting this year.