Recently, it was emphasized that middle income earners here in the Philippines will have lower income taxes to pay in accordance to the Tax Reform for Acceleration and Inclusion (TRAIN) law (Republic Act Number 10963) which will result in better take-home pay this year, according to a news article published by the Philippine News Agency (PNA). This is related to what was reported weeks ago by GMA Network news.
To put things in perspective, posted below is the excerpt from the PNA news report. Some parts in boldface…
Middle-income earners will have lower income taxes this year and thus, higher take-home pay, under Republic Act No 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Taxpayers earning more than PHP250,000 a year but not over PHP8 million will be subject to lower income tax rates ranging from 15 percent to 30 percent, from the previous 20 percent to 32 percent.
Those with annual taxable income of PHP250,000 or below will continue to be exempt from paying income taxes.
“Inaasahan natin na lalo pang lalakas ang domestic consumption na may malaking kontribusyon sa paglago ng ating ekonomiya. Dahil sa pinababang buwis, mas mataas ang take-home pay ng mga empleyado na magiging malaking tulong sa gitna ng mataas na presyo ng mga bilihin (We expect a stronger domestic consumption which will be big contribution to our economy. With lower tax and higher take-home pay, this will be a good help amid the rising prices of commodities),” Senator Sherwin Gatchalian said in a statement on Monday.
Gatchalian cited the Teacher 1 post, with a monthly salary of PHP25,439 or Salary Grade (SG) 11, will now have monthly tax savings of PHP420.83 or PHP5,050 for the year.
A Nurse III with SG 17 or an entry level monthly income of PHP43,030 will save PHP1,289.13 monthly or PHP15,469 yearly.
“Dahil sa mas mataas ang kanilang kita, inaasahan din natin na magiging maganda itong insentibo para sa mga empleyado na lalo pa nilang paghusayan ang kanilang trabaho at magtulak sa kanila para mag impok o kaya ay mamuhunan (Because of a higher take-home pay, workers will be inspired to work better, save and invest), Gatchalian said.
Also included in the TRAIN law are provisions for small and micro self-employed professionals, who now have the option to pay a simpler, flat tax of eight percent on gross sales in lieu of the income and percentage tax.
Taxpayers can save time falling in line and filing and paying from eight times a year will be reduced to just four.
Estate tax will also be lowered from 20 percent to a single rate of six percent for net estate with standard deduction of PHP5 million as well as exemption for the first PHP10 million for the family home.
Let me end this piece by asking you readers: What is your reaction to this new development? Are you qualified for a reduction of income taxes under the TRAIN Law? Have you consulted with a certified tax expert already?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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