Senate bill wants workers earning under P500,000 to be exempt from income tax
A BILL seeking to exempt workers earning less than P500,000 from income tax has been filed in the Senate.
Senate Bill No. 1685, filed by Senator Jose P. Ejercito, also known as Jinggoy Estrada, proposes to amend Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law by imposing rate tiers for taxable income.
“This measure seeks to correct the shortcomings of the TRAIN Law by increasing the take home pay of income earners, to help them achieve financial security and improve their standard of living” Mr. Estrada said in the bill’s explanatory note.
He added that higher take-home pay will allow individuals to contribute more to the economy “as active participants in robust exchange of goods and services.”
“Undeniably, the current economic conditions still make it difficult for workers to decently provide for their families. This amendment to the TRAIN Law seeks to give them immediate and visible results of their benefits on tax reform,” he said.
Beyond the exempt tier, those with taxable income of between P500,000 and less than P800,000 will be charged 15% of the amount that exceeds P500,000.
Those earnings between P800,000 and less than P1.6 million will pay P22,500 plus 20% of the total over P800,000.
Those earnings between P1.6 million and less than P2.8 million will pay P102,500 plus 25% of the total over P1.6 million, while those earnings between P2.8 million and less than P8.8 million will pay P402,500 plus 30% of the excess over P2.8 million.
For individuals with taxable income exceeding P8.8 million, the tax due is P2,202,500 and 35% of the excess over P8.8 million.
Under the TRAIN law, incomes of up to P250,000 are exempt from income tax, with the top marginal rate of 35% set for incomes of P8 million and above. — Adrian H. Halili
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