By Argyll Cyrus Geducos
Malacañang has welcomed the passage of House Bill number 5636 or the Tax Reform for Acceleration and Inclusion Act as this will lead the country a step towards the golden age of infrastructure.
The House of Representatives (HOR) overwhelmingly approved the comprehensive tax reform package on third and final reading on Wednesday.
Presidential Spokesperson Ernesto Abella said that the tax reform package, once passed, will raise an estimated P162 billion in annual net revenues, something which is vital to the realization of the Duterte administration’s ambitious “Build, Build, Build!” infrastructure program.
“We expect to be steering the Philippines towards the golden age of infrastructure and will propel economic growth within the next five years,” he added.
President Duterte on Monday has certified as urgent the tax reform package which contains the first batch of tax reforms being proposed by the Department of Finance (DOF).
In his letter submitted to Senate President Koko Pimentel and House Speaker Pantaleon Alvarez, Duterte noted that tax reform is necessary to “achieve a simpler, more equitable and more efficient tax system”.
The said tax system is characterized by lower personal income tax rates, a broader value added tax (VAT) base, and higher excise taxes on oil products and automobiles, among others.
Under HB 5636, the maximum rate of personal income tax will be reduced overtime from the current 32 percent to 25 percent, except for high income earners.
Under the bill, those who are earning P250,000 annually will then be exempted from paying income taxes while the “ultra-rich” will be levied a higher rate of 35 percent from the current 32 percent.
The mandated 13th month pay up to P82,000, and other bonuses will still be tax-free.
The measure, however, also proposes higher excise taxes on refined petroleum products and automobiles, except for buses, trucks, cargo vans, jeeps, jeepney substitutes, and special purpose vehicles.
An additional P10-tax per liter of volume capacity on sugar-sweetened beverages and carbonated drinks will also be imposed.
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