DOF open to review proposed income tax adjustments
MANILA, Philippines – The Department of Finance (DOF) is open to studying the proposal to lower individual income taxes in the country, which are currently the highest in the ASEAN region.
Finance Secretary Cesar Purisima said proposals to reduce taxes, however, should also be compensated by a revenue measure that also needs further study.
Purisima said Congress should first approve the finance department’s revenue enhancing measures, including the rationalization of fiscal incentives, before deliberating on tax reduction.
The Philippines’ current personal income tax rate of 32 percent on taxable income of P500,000 is the highest in the ASEAN region.
In Indonesia, the tax rate is set at 30 percent for earnings of over P1.8 million; tax rate in Laos is at 20 percent for over P2.8 million; Malaysia, 26 percent for over P1.37 million; Singapore, 20 percent for over P11.2 million; Thailand, 35 percent for over P5.4 million; and Vietnam, 35 percent for over P1.99 million.
Purisima said the DOF and the Department of Trade and Industry (DTI) are set to submit to Congress the joint proposed bill on rationalization of tax incentives.
“We’ve reached agreement with DTI finally. We are submitting this week the revised version of it,” he said.
The DOF said about P30 billion in savings will be generated once the current fiscal incentive law is rationalized.
Bureau of Internal Revenue Commissioner Kim Jacinto-Henares earlier said they are also open to reducing the individual income tax rate, but stressed the need for a thorough study.
Senator Juan Edgardo Angara, meanwhile, has filed a bill seeking to lower the individual income tax rate to 25 percent as well as adjust lower tax brackets starting 2015.