The House of Representatives is eyeing to pass a bill lowering individual income-tax rate in June, a lawmaker said on Tuesday.
Deputy Majority Leader and National Unity Party Rep. Magtanggol T. Gunigundo of Valenzuela, at a news conference, said that the tax measure will most likely be approved on third reading before the second regular session ends on June 11, as members of the House Committee on Ways and Means, who tackle the measure, are finalizing the discussions on the tax bill.
“The House Committee on Ways and Means’s technical working group is currently consolidating the 13 bills on lowering income-tax rate; hopefully, we will approve it on final reading before Congress’s second regular session ends,” he said.
Gunigundo filed House Bill 4099, seeking to lower individual and corporate income-tax rates to 15 percent, from the current 32 percent and 30 percent, respectively.
He said his proposal, if enacted into law, will definitely reduce the number of Filipinos who do not pay taxes, as lower taxes mean higher level of compliance.
According to Gunigundo, the advantages of having 15-percent income-tax rates are enormous, among them it will stimulate the economy by providing individual taxpayers more after tax income, or disposable income, which they can either save or spend in the engagement of services or purchase of goods that are subject to value-added tax.
Meanwhile, House Committee on Ways and Means Chairman and Liberal Party Rep. Romero Quimbo of Marikina said his panel is now finalizing the substitute bill consolidating pending measures on lowering the individual income-tax rate and simplifying the country’s tax structure.
Quimbo’s House Bill (HB) 4829 is also among the 13 pending bills, which seek to restructure the income taxes imposed on individuals.
HB 4829 is seeking for the revision of income taxes for compensation-income earners, self-employed and professionals, and corporations through simplification of tiers and rates, and indexation to inflation.
Quimbo added that the current income taxes imposed on individuals have become uncompetitive and unresponsive.
Currently, an employee, who has an annual taxable income of as low as P10,000 and less is already paying a 5-percent tax, which goes up to a high of 32 percent for those earning P500,000 and above.
He said since the effectivity on January 1, 1998, of the National Internal Revenue Code of 1997, the levels of taxable income brackets have been pegged at the 1998, Consumer Price Index (CPI) of 67.8 percent, which is starkly less than half of the present CPI of 137.7 percent.
Earlier, Finance Undersecretary Jeremias Paul warned lawmakers that reducing the individual income-tax rates may cause the government to lose revenues totaling as much as 1.5 percent of the country’s gross domestic product, or P30 billion. “We need to have a compensating measure. It has to be revenue-neutral,” he said.