Senate Approves ₱250,000 Tax Exemption
The Senate has approved the third and final reading of the government’s proposed tax reform package.
The latest tax reform package aims to provide tax relief and exemption for around 6.8 million workers in the Philippines. At the same time, this tax reform is also one of the sources of revenue for the government’s upcoming infrastructure projects.
The reform package received 17 votes ofapproval out of the 18 votes.
Under the Tax Reform for Acceleration and Inclusion Bill (TRAIN), the first ₱250,000 annual taxable income will be exempted from tax, as well as ₱82,000 tax exemption for the 13th month pay and other bonuses. This will translate to a tax-free monthly income of approximately ₱21,000.
According to Senator Angara, this will go down in the country’s history as the biggest income tax relief that will be granted to the working population.
Under the proposed tax scheme, a call center agent with a monthly income of ₱21,000 will be exempted from income taxes, and hence increases his or her disposable income by₱2,393 a month.
Based on the data from the Bureau of Internal Revenue, almost all or 99% of the estimated 7.5 million individual income taxpayers will enjoy lower income tax rates. The first phase of the reform will take effect on January 1, 2018.