Senate OKs P250K annual income tax exemption
MANILA, Philippines – The Senate on Wednesday, November 22, approved a higher personal income tax exemption for Filipinos of P250,000 annually, effectively increasing the take-home pay of taxpayers.
Senate ways and means committee chair Juan Edgardo Angara said the P250,000 exemption covers all workers, including employees and self-employed, no matter if the income is greater than that. Angara also said the tax burden will be transferred to the rich.
Once approved into law, Filipinos earning P21,000 a month will be exempt from paying income taxes. The exemption approved by the Senate essentially followed the versions of the Department of Finance and the House of Representatives.
“You’ll pay less taxes, bigger exemption. Mas malaki mauuwi (the take-home pay is bigger). It’s available to anybody who earns more than P250,000," Angara told reporters.
The Senate version also retains the P82,000 tax exemption for 13th month pay and other bonuses.
Here is the approved income tax scheme under the current Senate version effective January 1, 2018:
Originally, Angara pushed for a a P150,000 exemption, including workers earning P250,000 with 4 dependents. He then amended it to propose a staggered income tax exemption: P150,000 for 2018, P200,000 for 2019, and P250,000 for 2020.
Senate President Pro-Tempore Ralph Recto then proposed the flat P250,000 exemption, which was the exemption that was approved.
Angara also claimed that the current Senate version has exceeded the DOF revenue target of P130 billion, as the measure is supposedly expected to generate P159.5 billion.
The Senate version is still significantly different from that of the House, which has a two-tier tax scheme for personal income tax from 2018 to 2020 and 2021 onwards.
After the Senate passes the bill, both chambers of Congress would have to undergo a bicameral conference committee to thresh out differences between the two versions. – Rappler.com