Income tax–exempt Filipinos to triple to 6M under Duterte package — DOF

MANILA — The number of Filipinos to be exempted from income taxes will triple to six million under the Duterte administration’s first tax reform package, according to the Department of Finance.

Based on preliminary DOF estimates, there are currently two million minimum-wage earners who were exempted from personal income taxes under the current tax structure.

In a statement on Thursday, the DOF said that as the tax-exempt threshold would be raised to an annual income of at least P250,000, an additional four million Filipinos earning such amount would no longer have to pay personal income tax by next year if Congress approved House Bill No. 5636 within 2017.

“This means compensation earners with a monthly income of P21,000 and below will pay zero income tax once the tax reform package is enacted by the Congress and becomes a law,” the DOF said.

According to the DOF, the six million Filipinos to be exempted from personal income tax under HB 5636 accounted for 83 percent of the base covering individual taxpayers.

HB 5636 contained the Department of Finance’s proposal to ease the tax burden on personal income earners while slapping new or additional taxes on consumption.

Last week, the House of Representatives passed HB 5636 on third and final reading, with 246 votes for, nine against and one abstention, ahead of Congress’ sine die adjournment.

If approved by Congress and implemented next year, the government will lose P141.4 billion from lower personal income taxes on top of foregone revenues of P3.1 billion from the reduction in estate and donor’s taxes.