Finance Secretary Benjamin Diokno said the current tax system, particularly on personal and corporate income tax, should be given a chance to be fully implemented, as it is “too early” at this point to amend it again.
Diokno made this comment yesterday after he was asked by reporters if it would be a good time to further slash personal income tax (PIT) rates amid proposals in Congress.
“We just amended both PIT and CIT (corporate income tax). Let’s give the new tax system a chance to operate. Too early to tinker with it,” Diokno said.
In the previous administration, the government passed into law the Tax Reform for Acceleration and Inclusion Law, which reduced the PIT for 99 percent of taxpayers, and the Corporate Recovery and Tax Incentives for Enterprises Act, which lowered the CIT and redesigned the fiscal incentives system.
In Congress, Rep. France Castro of the Alliance of Concerned Teachers party-list recently filed a house bill entitled Tax Reform Act for the Masses and the Middle Class.
“Rising prices and untamed inflation rates in the past few years all the more justify the need for a tax reform package that would reduce the income tax rates of the overburdened Filipino working-class families,” Castro said.
“Reducing income tax rates for working families will not only improve their way of life, but also strengthen their purchasing power which will boost overall domestic demand for consumer goods,” she added.
Castro said the bill includes setting a 20 percent maximum PIT rate for individual citizens, the exemption of the first P400,000 of their incomes, bringing back additional exemptions for dependents (this time senior citizens and persons with disabilities may be claimed as dependents), and raising of the cap for tax-free bonuses to P150,000. The proposed measure also mandates the Bureau of Internal Revenue to set up a progressive, 10-bracket (in the minimum) PIT schedule.
