NINE out of 10 taxpayers could expect their purchasing power to increase by 20 percent if the administration’s proposed tax reform measure is enacted into law.
Buhay Rep. Lito Atienza said the pending bill could help improve the lives of many individual taxpayers.
“The tax reductions are bound to rev up consumption spending by middle-class families, which may well help counteract possible delays in new business investments due to the declaration of martial law in Mindanao and Marawi siege,” he said.
The Senate is anticipated to pass the tax relief measure once its regular session resumes on July 24, he said.
Citing the projections of COL Financial Group Inc., the country’s leading online stockbroker, Atienza said “the cut in the personal taxes will benefit mostly salaried workers.”
“It will lead to a 20-percent increase in disposable income for 93 percent of taxpayers,” he said.
The House of Representatives approved on third and final reading House Bill No. 5636.
Under the bill, those receiving an annual compensation of not over P250,000 shall be exempted from paying income taxes.
On the other hand, workers receiving P250,000 but not over P400,000 shall be taxed 20 percent of the excess of over P250,000.
Those earning over P400,000 but not over P800,000 shall be taxed P30,000, plus 25 percent of the excess of over P400,000, while those earning more than P800,000 but not over P2 million shall be taxed P130,000, plus 30 percent of the excess of over P800,000.
Self-employed individuals and professionals shall also be taxed less on gross sales or receipts.