The Finance Department plans to implement the tax reform package within the first three years of the Duterte administration.
Finance Secretary Carlos Dominguez III told reporters the agency proposed to reduce the corporate income tax rate from 30 percent to 25 percent to attract more foreign investors.
“The first thing they look at is the headline tax rates. Ours is, right now, at 30 percent and in other areas, it is much less than that,” Dominguez said.
He said along with the plan to reduce corporate income taxes, the department wanted to reduce individual income tax rate, as promised by President Rodrigo Duterte in his first state of the nation address.
“Our plan is to reduce the tax rates over three years from 30 percent to 25 percent. We will do the same for individual income tax rates. So that will be done. Incidentally, we will do the same for individual tax rates,” he said.
Dominguez said the agency also planned to adjust the tax tables which was last amended in 1997. “We hope to be able to adjust it with inflation and the top tax rate will be much higher than P500,000 a year,” he said.
The current individual income tax bracket was set in 1997. A Filipino employee earning a little over P500,000 is taxed 32 percent while his Thai counterpart earning the equivalent income is only taxed 10 percent.
“We are also planning to reduce the tax rate for individuals from 32 percent down to 25 percent over time again, maybe in two to three years,” Dominguez said.
“These our plans. We have to go to the House and the Senate, so we have a big fight coming along. Next week, we are going to start to argue with our friends at the House and Senate,” he said.
Dominguez said the tax reform package is set to be submitted to the House of Representatives on Aug. 22.
