Lower income taxes pushed
To increase tax compliance and broaden the taxpayer base, the government needs to lower the personal income tax ceiling to between 20 and 25 percent from the current 35 percent, according to a tax reform policy advocate.
Raymond Abrea, a former Bureau of Internal Revenue (BIR) examiner and a founding trustee of think tank Center for Strategic Reforms of the Philippines, said lowering the ceiling would put the country’s tax rates in line with world standards. He explained that under the Tax Reform for Acceleration and Inclusion (TRAIN) law, the first part of which was signed into law back in 2017 under former President Rodrigo Duterte, those earning above P8 million a year were deemed “ultra rich” and slapped with an income tax of 35 percent. This has thus discouraged many of them from paying the right tax, said Abrea during the pre-event for the 2023 International Tax Conference slated in Makati on June 15.
He said many taxpayers who do not want to be tagged as “ultra rich” as is stipulated under the TRAIN law. By lowering their income tax rate, this category could become a significant source of additional income tax revenue.
Abrea, who is also the founding chair and the senior tax advisor of the Asian Consulting Group (ACG), said they will hold the 2023 International Tax Conference to discuss and address important tax issues, including topics which touch on sustainability and digitalization. The forum is also aimed to provide a suitable platform for leaders, executives, and influential figures from the corporate and governmental sectors to discuss pressing tax issues.
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