MALOLOS CITY — 99 percent of Filipino taxpayers shall benefit from the proposed tax reform bill of the Duterte administration.
In her discussion during the 2nd ASEAN Multi-Sectoral Forum of the Philippine Information Agency (PIA) Region 3, Finance Assistant Secretary Teresa Habitan said the Tax Reform for Acceleration and Inclusion (TRAIN) seeks to simplify the current tax system and make it fairer and more efficient to Filipino taxpayers.
It is expected to help reduce poverty rate from 21.6% to 14% by 2022.
“We have some of the highest tax rates in Asia and in ASEAN (Association of Southeast Asian Nations) which means, we are not competitive enough,” Habitan disclosed.
Among the proposed new taxes included in the TRAIN bill are reform in lowering the personal income tax, expanded value-added tax (VAT) coverage, excise tax on fuel products, and excise tax on particular automobiles.
With the proposed tax reform, Habitan also ensured the boost of employment to the country’s labor sector, especially small workers.
“The tax reform will boost investments which means more employment in the country,” she added.
The tax reform intends to raise the per capita gross national income from US$3,500 to US$12,000.
With this, the new personal income tax is expected to uplift Filipino workers.
Under the measure, the maximum rate of personal income tax will be reduced over time from the current 32% to 25%, except for high-income earners.
Those earning Php250,000 or below annually will be exempted from paying income taxes.
The mandated 13th month pay up to Php82,000 as well as other bonuses will still be tax-free.
Among the ASEAN countries, the Philippines has the highest VAT rate with 12%.
Five countries have only 10% namely Cambodia, Indonesia, Laos, Thailand, and Vietnam.
VAT rate for other countries are 7% for Singapore, 6% for Malaysia, 5% for Myanmar, and 0 Brunei.
Currently, the country has 59 lines of VAT exemptions, compared to 37 for Indonesia, 35 for Thailand, and 14 for Malaysia.
Compared to other countries, the Philippines has one of the lowest taxes on fuel with zero tax on diesel and fuel taxes have not increased since 1997.
The proposed bill also increases the tax rates of some luxury automobiles.
“The tax reform is our investment in our future. We have to be reminded and to know that no investment is ever easy,” Habitan emphasized.
The Multi-Sectoral Forum also featured an Information and Service Caravan where citizens got immediate support, consultation and free items from participating government agencies.
Aside from forums, PIA has been staging Campus Tours in colleges and universities, and information kiosks in public areas all over Central Luzon.
“We are doing this campaign, not only because we chair this year’s ASEAN, but also because we want to raise public awareness about ASEAN. We want the people to know the fullness of ASEAN,” PIA Regional Director William Beltran said. (CLJD/MJSD-PIA 3)