House Bill Eyes Higher Taxes Tax Exemptions Filipino Workers AdD Riking Privices
towards Kenneth Christian L. Basilio, Reporting
A bill seeking to increase the income tax exemption for workers has been filed in the House of Representatives, a move aimed at reducing the burden of the rising cost of living and making the tax system larger. “
Filed on November 17, House Bill No. 6036 proposes to amend the tax code by raising the tax ceiling for income of P40,000 per month, or p480,000 per year, from P250,000.
“It aims to restore the real value of the exemption, provide tangible relief to people’s work and help ensure that the tax system remains balanced with current economic conditions,” Party-Pers. Res Marie D. Montes said in the explanatory note of the Bill.
The Philippines raised the P250,000 exemption under the 2017 income tax law, where salaried employees are capped at P20,000 per month.
“While this adjustment was intended to align the tax rates with the prevailing rates at the time, the actual amount of the remission has been removed by inflation,” said Ms. Montes.
“The rising cost of living, driven by the increase in food, fuel, transportation services and transportation costs has significantly reduced the purchasing power of ordinary Phikazi workers,” he added.
He said many low- and middle-income workers are losing a significant portion of their take-home pay.
“Raising the exemption limit will allow workers to save their money, stimulate household consumption and support inclusive economic growth,” it added.
Under the bill, those who earn more than P480,000 but not more than P650,000 annually will be taxed at 15% of the income above the lower limit. Workers earning as much as P1.3 million a year will face a tax of P37,500 and 25% of the excess P650,000.
Individuals with an annual income of ASTION Million will be taxed at P167,000 and 25% of the amount above P1.3 million. Those who earn as much as P12.8 million a year will pay P642,500 and 30% of income that exceeds P3.2 million.
Workers making more than P12.8 million will be paid a tax of millions
“Increasing the tax exemption will reduce the tax base of the government,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory & Research, Inc., said in a Viber message. He said the Government could raise other taxes to offset the lost revenue, which could reduce public programs and projects.
“The economic impact ultimately depends on how the measure is done,” John Paolo R. Rivera, a senior research fellow at the Institute for Development, said in a Viber message.
“If properly targeted and paired with reforms that improve collection efficiency and broaden the tax base, it can raise purchasing power without sustaining fiscal stability,” he added.
He said this move could increase household spending and support economic growth. But Mr. Erece warned it could also be the end of the money if demand grows faster than supply.
“High spending power can only do so much if the supply side is not addressed,” he said. “Strong demand without transplants may exist at higher rates.”
