BIR open to reducing personal income tax
March 18, 2014 at 11:49
BIR open to reducing personal income tax
MANILA, Philippines – The Bureau of Internal Revenue (BIR) is open to reducing the country’s personal income tax rate, which currently stands at 32 percent.
The personal income tax is a tax collected from individuals and imposed on different sources of income like labor, pension, interest and dividends.
BIR Commissioner Kim Henares said Thursday the agency would come up with proposals to lower income tax rates but emphasized that the matter would need thorough study.
“This is something that needs to be addressed in a holistic manner,” she said.
“This year, we’re not in favor of doing anything about lowering tax rate. What we’re concentrating on is plugging the loopholes and rationalizing things like the fiscal incentive rationalization, the Tax Information Management Transparency Act, revenue sharing and Customs modernization. After we have done this, and I’ve said this long ago, if most of us pay the right taxes, we really can start thinking about lowering rates,” Henares said in an interview over ANC Thursday.
The statement came after the filing of a bill by Sen. Juan Edgardo Angara that seeks to lower the individual income tax rate from 32 percent to 25 percent, as well as adjust lower tax brackets starting next year.
Income tax rates currently range from five percent for employees earning P10,000 a year to 32 percent for those earning at least P500,000 annually.
Angara said the bill was in preparation for the Association of Southeast Asian Nations integration and consistent with the country’s commitment to the 10-member ASEAN Economic Community blueprint, which seeks to transform the organization into a single market and production base by December 2015.
He noted that the Philippines has the third highest individual income tax rate, next to Thailand’s 37 percent and Vietnam’s 35 percent.
Meanwhile, the highest tax bracket of Cambodia is 20 percent; Indonesia, 30 percent; Laos, 24 percent; Malaysia, 26 percent; Myanmar, 20 percent and Singapore, 20 percent.
Angara pointed out that the country’s current individual income tax bracket has remained unchanged since 1997, even when the consumer price index has almost doubled.
Source: https://www.philstar.com/headlines/2014/03/08/1298267/bir-open-reducing-personal-income-tax
