Ninety-nine percent of Filipino workers will soon enjoy higher take home pay when the income tax system will finally be amended two decades after it was enacted, Senator Sonny Angara said. Under the Senate ways and means committee report, the first P150,000 annual taxable income will be exempted which means Filipino earning P25,000 per month with four dependents will be exempted from income tax.
Moreover, P82,000 tax exemption for 13th month pay and other bonuses will be retained and the maximum P100,000 additional exemption for up to four dependents.
With this proposal, based on data from the Bureau of Internal Revenue (BIR), almost all or 99% of the estimated 7.5 million individual income taxpayers will enjoy lower income tax rates.
“Our workers are finally getting the tax relief due them. We have been advocating the reform of our income tax brackets and rates for several years now to put more money in people’s pockets,” said Senator Sonny Angara, chairman of the Senate ways and means committee.
For instance, a teacher, who has two dependents, with a monthly income of about P17,254 is currently taxed at 20%. Under the proposal, he or she will be already exempt and will no longer have to pay taxes. The teacher will be able to take home bigger pay and save roughly P13,176 in annual taxes or P1,098 monthly savings.
Another example: a call center agent, with no dependent, earning about P16,136 a month is currently taxed at 20%. Under the proposal, his or her current P20,576 annual tax due will be reduced to P4,557 at a lower tax rate of 15%, resulting to approximately P16,019 annual savings–close to the call center agent’s monthly income.
“Para na rin po tayong nagbigay ng 14th month pay sa ating mga kababayan. Lalaki na ang maiuuwing sahod o kita ng mga Pilipino sa kanilang pamilya. Sa extra na take-home pay, may extra para sa pagkain ng pamilya, para sa upa ng bahay, para sa damit at gatas ni baby, para sa matrikula, baon at school project ng mga bata, o kaya para sa gamot ni lola o lolo,” the senator said.