House eyes lowering of income tax

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Metro Manila (CNN Philippines) — Entry-level workers may look forward to a bigger take-home pay should Congress pass the proposed tax reform bill.

The House of Representatives began deliberations on Wednesday on the Tax Reform for Acceleration and Inclusion (TRAIN) bill. Among others, it aims to reduce the personal income tax on a certain level of income.

Authored by Quirino Representative and Ways and Means Committee Head Dakila Cua, the bill will amend select provisions of the National Internal Revenue Code of 1997 or the Tax Code.

"The poorer and the middle class will actually see a higher take home pay, effective take home pay and the richest will have to contribute more and that is the intention of this tax reform, to improve the equity of this tax system," said Finance Undersecretary Karl Chua.

Under the bill, those who earn less than P250,000 year will no longer pay income tax beginning 2018. Those who earn more than P250,000 will also pay less income tax.

The maximum tax rate, meanwhile, will be cut from 32 percent to 25 percent, except for high income earners, or those who earn more than P800,000.


To make up for possible revenue loss which may amount to P139.6 billion, the TRAIN bill will raise excise taxes on fuel and cars.

The tax on unleaded gasoline will rise from P4.35 to P7 beginning July 1. It will go up to P9 in 2018 and to P10 in 2019.

Previously untaxed kerosene, diesel and LPG will now have an excise tax of P3 beginning this year, P5 in 2018 and P6 in 2019.


The proposed bill will also repeal around 200 special laws on value-added tax exemptions, including those enjoyed by cooperatives and organizations like the Girl Scouts and Boy Scouts of the Philippines.

Finance Secretary Carlos Dominguez also endorsed the same bill in the Senate in September 2016. Individual measures to lower income tax have also been filed by a number of senators.

Earlier this month, Ako Bicol Partylist Representative Rodel Batocabe proposed to raise the excise tax on cosmetic products, saying targeting petroleum products will affect the prices of goods and commute, directly affecting those living below the poverty line. The congressman later withdrew the bill after it drew flak from various groups.

CNN Philippines' correspondent Joyce Ilas contributed to this report.