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

[Lee2]

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

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/ 

[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.

[BudM]

They could do away with income tax for everyone and jack the VAT up to 25 or 30 percent and then you and I can help them pay it all too.

[suzukig1]

They could do away with income tax for everyone and jack the VAT up to 25 or 30 percent and then you and I can help them pay it all too.

VATs result in poor people paying a higher percentage of their income in taxes versus wealthy people pay a lower percentage of their income in taxes.  Sure wealthy will buy more stuff and on an absolute basis would pay more in taxes but that's a choice and not a compulsory (income) tax.

[BudM]

VATs result in poor people paying a higher percentage of their income in taxes versus wealthy people pay a lower percentage of their income in taxes.  Sure wealthy will buy more stuff and on an absolute basis would pay more in taxes but that's a choice and not a compulsory (income) tax.

I don't think they should raise the VAT like that.  I was just responding to a response about maybe an income tax isn't needed which was to something I said. Hell, I wouldn't like it is they raised the VAT.  Then I would have to pay income taxes to the US and more VAT to the Philippines.  I want some money for myself.

[bigpearl]

Quid pro Quo.

Cheers, Steve.