BIR releases guidelines on new income tax rates

The Bureau of Internal Revenue has finally released the implementing rules and regulations to implement the new personal income tax rates under the Tax Reform for Acceleration and Inclusion Act (TRAIN), in line with its plan to come out with all of the revenue regulations concerning the law within the first quarter.

Deputy Commissioner Marissa O. Cabreros told reporters on the sidelines of a Tax Management Association of the Philippines seminar Thursday, that even as the Revenue Regulations (RR) No. 8-2018 implementing the income tax provisions of the TRAIN was published on the BIR website only on Thursday, earlier circulars and advisories mandated the new tax rates effective Jan. 1.

Signed by President Duterte in December, the TRAIN Law starting Jan. 1 this year jacked up or slapped new excise taxes on oil, cigarettes, sugary drinks and vehicles, among other goods, to compensate for the restructured personal income tax regime that raised the tax-exempt cap to an annual salary of P250,000.

More rules

Cabreros said the BIR by next month would be coming out with four more RRs covering donor’s and estate tax, value-added tax, as well as excise taxes on cosmetic procedures and sugar-sweetened beverages.

In January, the BIR already issued the RRs for the increase in excise taxes on minerals, cigarettes, and vehicles as well as documentary stamp tax rates under the TRAIN Law.

As for RR 8-2018, Cabreros said it was meant to “organize or properly guide the taxpayers on how to properly implement” the new personal income tax rates.

“It [RR 8-2018] was meant to give illustrations compared  with the other RRs that were straightforward. The model that was adopted by the team that created the RR is to give illustrations that were scenario-based so people can relate easily or fit in to the illustrations,” Cabreros explained.

Cabreros said employees whose employers remain non-compliant with the new tax rates could send their complaints to the BIR.