QUEZON CITYThe Social Security System has expressed its support for the holistic and timely passage of the tax reform proposal of the Department of Finance (DOF) which mainly aims for a simpler, fairer and more efficient tax system in the country that will benefit largely the poor and middle-income earners.
"We, at SSS, fully support the passage of the first package of the Comprehensive Tax Reform Program of President Rodrigo Duterte under the leadership of Finance Secretary Carlos G. Dominguez III," Social Security Commission Chairman Amado D. Valdez said.
DOF said some 4.66 million taxpayers, or more than double the current figure of 1.8 million, will no longer pay their PIT under the government's highly progressive CTRP.
"We are in the same path with Secretary Dominguez's aim to bring more money into the people's pocket. With this, taxpayers will have an extra room in their budget to save up for their future and ensure that they will have enough when they leave the workforce. We hope that the package be passed into law in time with the schedule targeted by the DOF," Valdez said.
DOF said those earning between the above-minimum wage rate and P22,000 a month will pay zero tax under HB 4774. The first P82,000 in the 13th month pay and other bonuses will be exempted from the PIT computation.
For instance, a call center agent who earns P21,000 a month with a gross income of P273,000 inclusive of the 13th month pay and other benefits, will still fall under the zero-tax bracket. This will save him or her almost P22,000 in foregone income tax payments; because under the current system, the call center agent, even with two dependents, would still have to pay P21,867 in income tax because of an outdated tax structure in which his or her net taxable income of P136,834 would still be taxed P8,500 plus 20 percent in excess of P70,000.
"[The CTRP will] enable the government to make the country's tax system more progressive, especially for low- and middle-income earners, and at the same time generate sufficient revenues for unmatched higher spending on infrastructure; on education, health and other forms of human capital development; and on social protection for the poorest Filipinos to cushion the initial impact of the proposed adjustments in consumption taxes," Dominguez said earlier.
The DOF said earlier that the target passage of the tax reform package will be in May this year, to be implemented in the succeeding month. To date, the Ways and Means Committee in the lower house has recently agreed to pass in principle the CTRP. It is subject to the creation of a Technical Working Group (TWG) that would draw up a substitute bill consolidating the proposed reforms by the DOF with other tax-related proposals by the lawmakers.
Source: Philippines Information Agency