Sunday, April 16, 2006
Bill restructuring income tax passed
A BILL aimed at exempting minimum wage earners from paying income taxes passed the second reading at the House of Representatives.
The bill known as "Restructuring the Income Taxation for Individuals" was approved on second reading last April 5 just before Congress took its break for the Lenten season.
Among the benefits stipulated in the proposed bill are exemption of minimum wage earners from income tax and lowering the income tax of low middle-income earners.
In the said bill, those earning below P55,000 annually would be exempted from income tax. Those earning from P55,000 to P150,000 meanwhile will pay P23,750 plus 28 percent of excess of P150,000.
For the P250,000 to P350,000 bracket, an income tax of P51,750 plus 31 percent of excess of P250,000 will be imposed.
For the P350,000 to P500,000 bracket, P82,750 plus 33 percent of excess of P350,000 will be imposed. And for the over half a million peso earners, a P132,250 plus 35 percent of excess of P500,000 will be imposed.
The bill also proposed for an increase by 50 percent of the personal exemptions enjoyed by every taxpayer.
For single and legally separated taxpayers with no qualified dependents, a basic personal exemption of P30,000 is proposed. For the head of the family, P37,500; for each of the married individual, P48,000; while a P12,000 exemption will be added for each dependents not exceeding four.
The bill also offers 40 percent optional standard deduction (OSD) to professionals and self-employed in lieu of the expenses/deductions, which are difficult to be determined.
HB 5296 also aims to reduce tax gap or tax leakage on individual tax income by adopting the SNITS (Simplified Net Income Taxation Scheme) for individuals engaged in trade/business and/or practice of their profession.
SNITS provides limited deductions from the gross revenues of self-employed and/or professionals. (BOT)
For Bisaya stories from Davao. Click here. (April 16, 2006 issue)
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