Individuals earning P300,000 or less in a year should be exempted from paying income tax, a congressional leader said on Sunday.
House Deputy Speaker Romero Quimbo of Marikina City (Metro Manila) made the proposal under his House Bill 20, which also seeks to increase the highest tax bracket to P10 million and above.
Quimbo said an annual income of P300,000 or below for a family of five is barely enough to make ends meet with food expenses, rent and education for three children, excluding emergency expenses.
Based on government data, there are 9,495,547 individuals whose annual income is P300,000 and below.
“With this proposal, almost 10 million taxpayers will finally be liberated from decades of suffering. Since 1997, the ordinary Filipino has been paying the highest tax rates in Asia. It’s time to set them free,” Quimbo said.
“Since the government is eyeing a radical overhaul of the income tax structure, it will achieve its aspiration for social justice by giving the low- to middle-income earners a higher income tax exemption. They [low-to middle-income earners] may not qualify as poor if we apply the official poverty definitions, but these are people who are just making ends meet and are highly vulnerable to crisis,” he added.
Existing law only exempts minimum wage earners from paying income tax.
Quimbo, chairman of the House Committee on Ways and Means in the previous Congress, is also the principal author of House Bill 2379, which seeks to lower corporate income tax from 30 percent to 25 percent as well as House Bill 3010, which grants tax amnesty for all unpaid estate taxes.