House bloc bill slashes tax rates for middle class households

THE House Makabayan bloc on Tuesday filed the proposed Tax Reform Act for the Masses and the Middle Class (TRAMM) to address “imbalances” in favor of poor and middle class households in the country.

In the unnumbered House bill, ACT Teachers Rep. France Castro, Gabriela Rep. Arlene Brosas and Kabataan Rep. Raoul Danniel Manuel said the bill aims to address imbalances brought about by regressive tax reform laws such as TRAIN and CREATE that offer “little” benefits to poor and middle-class families.

The lawmakers said rising commodity prices and untamed inf lation in the past few years all the more justify the need for a tax reform package that would reduce the income tax rates of overburdened Filipino working class families.

They said reducing income tax rates for working families will not only improve their way of life, but also strengthen their purchasing power, which will boost overall domestic demand for consumer goods.

“Rising prices and untamed inflation rates in the past few years all the more justify the need for a tax reform package that would reduce the income tax rates of the overburdened Filipino working class families. Reducing income tax rates for working families will not only improve their way of life, but also strengthen their purchasing power which will boost overall domestic demand for consumer goods,” Castro said.

The bill includes setting a 20 percent maximum personal income tax rate for individual citizens.

It also provides exemption of the first P400,000 of their income; bringing back additional exemptions for dependents, this time, senior citizens and persons with disabilities may be claimed as dependents.

The bill allows individual citizens an additional exemption of P25,000 for each dependent not exceeding five.

The measure also raised the cap for tax-free bonuses to P150,000.

“Our country remains among the most unequal in the world with income shares of the poorest and richest segments of the population almost stagnant for decades and now, personal income tax rates for the poor and middle-class citizens in the Philippines are even higher than rates in other countries such as Singapore. Other countries also have additional personal allowances and/or tax exemptions for dependents, unlike here in the Philippines,” Castro said.

“With increasing prices of basic goods and services, the passage of this bill is urgently needed. We urge our fellow lawmakers to give high priority to this bill and swiftly enact it into law,” Castro stressed.