PDut signs tax reform law

President Rodrigo Duterte on Tuesday, December 19, signed into law the tax reform package and the P3.767-trillion 2018 annual budget.

Duterte led the ceremonial signing of the budget and tax reform measures held at Malacañang Palace.

The Tax Reform for Acceleration and Inclusion (Train) law exempts from paying taxes the first P250,000 annual taxable income, meaning those earning P21,000 a month would no longer need to pay income taxes. It also raises the tax exemption for 13th month pay and other bonuses to P90,000.

Based on data from the Bureau of Internal Revenue, around 6.8 million or 90 percent of the 7.5 million individual income tax payers will be exempt from paying taxes starting 2018, more than triple than the current two million exempt minimum wage earners.

To compensate for loss of revenue from income taxes, Filipinos will need to pay excise tax on sweetened beverages, and higher excise taxes on petroleum, automobile, tobacco, mining and coal.

A P6 tax is imposed for beverages using caloric and non-caloric sweeteners, while P12 tax is implemented on beverages using high fructose corn syrup.

Beginning 2018, there will be an adjusted excise tax on LPG (P1), diesel fuel (P2.50),

and regular and unleaded premium gasoline (P7 from the current P4.35).

Excise tax doubles to four percent from two percent on vehicles worth P600,000; 10 percent on those worth P600,000 to P1 million; 20 percent on those worth P1 million to P4 million; and 50 percent on those worth above P4 million.

Electric and pick-up vehicles are exempt from paying excise tax while hybrid cars are taxed at half the rates, in a bid to promote greener and cleaner transportation.

Excise tax on all non-metallic mineral and quarry resources, and all metallic minerals, including copper, gold, and chromite, doubles to four percent from the current two percent.

TRAIN also increases the coal excise tax from P10 per metric ton to P50 per metric ton in the first year of its implementation; P100 in the second year; and P150 in the third and succeeding years.

Tobacco excise tax is also raised from the current P30 to P32.50 on January to June 2018; P35 on July to December 2018 to 2019; P37.50 from 2020 to 2021; P40 from 2022 to 2023; and four percent annual indexation from 2023 onwards.

Both houses of Congress ratified the tax measure on December 13.

The 2018 General Appropriations Act allots P3.767 trillion for the government’s operations for the period January 1 to December 31, 2018.

Authored by House appropriations committee chairman Karlo Nograles, the measure was ratified by both houses of Congress on December 12.

The 2018 budget is 12.4 percent higher than 2017’s P3.35-trillion budget. The biggest chunk goes to the Department of Education, which will get P553.313 billion, higher than this year’s P543.186 billion.

Other agencies that will receive the highest budget allocations are the Department of Interior and Local Government (P170.8 billion), Department of National Defense (P149.7 billion), and Department of Social Welfare and Development (P141.8 billion). SunStar Philippines