Good news, FHM Nation! According to GMA News Online, the leaders of the House of Representatives and Senate have agreed to fast-track deliberations on a comprehensive tax reform bill that aims to ease the tax burden of the Filipino working class.
Video via PTV
In fact, with congressional leaders keen on prioritizing its legislation, the law cutting income tax rates could be implemented as soon as 2015.
"Support for the Tax Reform for Inclusive Growth (TRIGR) movement does not emanate from the citizenry," says Marikina Representative Miro Quimbo. "My colleagues in the legislature have likewise expressed their support, even clamor, for tax reforms."
You know what that means, right? Mas mababang buwis para sa lahat!
So what would happen if the tax reform bills written by Rep. Quimbo and Senator Sonny Angara are approved? You might want to take note of the following proposed changes...
For starters, the bill will cut the maximum individual income tax rate from 32 percent to 25 percent. The country's current individual income tax bracket has remain unchanged since 1997 despite a doubling of the consumer price index (CPI). The value of the peso has inflated, which means our tax rates should adjust as well!
The bill is pushing for a flat income tax rate of 25 percent for self-employed individuals and professionals, along with a five percent minimum income tax rate. Only 15 percent of the total collection of individual income taxes was paid by self-employed individuals and professionals while 85 percent comes from compensation income earners. If this bill becomes a law, things will be more balanced.
The bill also proposes that the corporate income tax (CIT) be reduced from 30 percent to 25 percent and the minimum corporate income tax (MCIT) rate from two percent to five percent. Doing so will help attract other ASEAN countries to set up businesses and make investments in the Philippines, which can give us more revenues in the long run.
Rep. Quimbo plans to increase the tax exemption ceiling of 13th month pay and Christmas bonus from P30,000 to P70,000. This means your bonus will soon be tax-free if it's under P70,000.
"A fair and equitable tax system is a cornerstone of inclusive growth," adds Rep. Quimbo. "If we really want to achieve inclusive growth, we cannot disregard the plight of our taxpayers and continue bleeding them dry through our flawed tax system."