SEN. Juan Edgardo “Sonny” Angara has expressed dismay over the Bureau of Internal Revenue’s (BIR) continued refusal to cooperate with a panel working on the proposed amendments to the national internal revenue code that aims to expand the individual income tax exemption.
Angara pointed out that it has been eight months since the panel asked the BIR headed by Commissioner Kim Henares to justify their claims that the measure would result in huge revenue losses for the government.
“The failure of the BIR to provide us with the explanation is causing delay on the passage of the law,” said Angara, who chairs the Senate ways and means committee.
He then issued an ultimatum giving the BIR two more weeks to comply, otherwise they will be compelled to subpoena its top officials.
Angara’s panel is currently working on three measures (Senate Bills 1942, 2149 and 716), all seeking to lower the individual income taxes of ordinary salaried workers.
Angara authored SB 2149 that aims to compress the net taxable income brackets to five from the current seven and also lower tax rates across-the-board.
At present, an annual net income, after allowable deductions, of P10,000, which is the lowest in the tiers, is taxed five percent.
But under Angara’s proposal, the senator wants the “no tax zone” be raised to P20,000.
He is also proposing to lower the 15 percent tax for those earning P20,000 to P70,000 to 13 percent in 2016, and further to 10 percent by 2017.
The current net taxable income of between P30,000 and P70,000 is taxed P2,500 plus 15 percent of the amount over P30,000.
The proposed measure also seeks to slash the current highest tax bite of 32 percent for income above P500,000 to 25 percent by 2017.
This means that a small business owner whose net taxable income is P550,000 a year will see his tax payment go down to P97,500 in 2017 from the present P141,000.