DOF, BIR urged to issue advisory on TRAIN Law

A lawmaker on Wednesday urged the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to immediately issue a public advisory on how the new personal income tax exemption and income brackets will be implemented in light of the enactment of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

In a statement, Leyte Representative Henry Ong said the issuance of the advisory will help in clarifying matters on how and when the exemption and salary deductions will be computed and applied beginning the next cut-off period after January 1, 2018.

"Some employers and taxpayers may be unable to quickly recalibrate their payroll systems and software in January 2018, so when would be the deadline for them to comply?" Ong, the vice chairman of the House Committee on Banks and Financial Intermediaries, said in a statement.

"In my view, only the personal income tax exemption and salary deductions need immediate clarification while the other concerns in TRAIN can be addressed later," he added.

President Rodrigo Duterte on Wednesday signed the TRAIN bill into law. Under it, the income tax of wageearners would be decreased, but the excise tax imposed on goods and services would be increased.

Those earning not more than P250,000 per year will not be taxed beginning January 1 next year. Likewise, the measure will also provide P200 per month to the 10 million poorest households in the country to mitigate the effects of the program.

Ong said taxpayers should also be reminded that the TRAIN Law does not apply to the income tax return (ITR), which taxpayers need to file on or before April 16, 2018.

He said these ITRs would be for the income earned in 2017, and the TRAIN Law does not apply to 2017 income retroactively.

"The advisory from the DOF and BIR would serve to set things straight early on and avoid confusion or misunderstandings," Ong said.