It’s Your Money > Working in the Philippines

No tax on P1-M yearly personal income DOF weighs proposal

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Lee2:
I did not know that up to p500,000 was already exempt....

--- Quote ---The Department of Finance (DOF) is looking at exempting individuals who are earning not more than R1 million annually from paying income tax.

Finance Secretary Carlos G. Dominguez III said yesterday that the government will include an all-in income tax exemption of P1 million in its proposed comprehensive tax reform package to help the growing Filipino middle class.

“The tax table is created in 1997 and the maximum tax exemption at that time was P500,000. Then and now are not the same, you will reach the P500,000 max tax exemption very quickly,” Dominguez sad. “I think that’s not fair.”
“We think that has to be adjusted for some kind of adjustment recognizing inflationary factors,” he told reporters on the sidelines of the Financial Times-First Metro Investment Corp. Philippine Investment Summit.

The finance department is currently in consultations with the lawmakers in coming up with the new tax table, Dominguez said.
Read more at  http://www.mb.com.ph/no-tax-on-p1-m-yearly-personal-income/ 
--- End quote ---

suzukig1:
I don't think the comment in the article was worded correctly.  Phl income tax is progressive and you reach the highest tax rate once you hit P500,000.  So if they change the tax table and make the highest tax bracket P1,000,000 instead of P500,000 people will pay a lower percentage.

http://www.bir.gov.ph/index.php/tax-information/income-tax.html#it0012

BudM:
Yeah, the article is messed up.  And if they were to exempt 1m pesos a year, how many of your every day Filipinos are making 1m pesos a year?  They would not have too many people paying taxes since they would have to make 83 k plus pesos a month to do so.

Lee2:
We all pay tax in the form of VAT, I wonder if a tax system is even necessary.

BudM:
Yeah, everyone pays other form of taxes but who is going to pay income tax? Just wealthy people.  The other taxes don't pay for all that society needs.

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