BPO workers to save P28K under tax reform plan – DOF

Call center agents and other workers earning at least P21,000 a month with no dependents are to save P28,000 a year under the Department of Finance 's (DOF) proposed tax reform plan, GMA News reported.

In a statement on Thursday, Finance Undersecretary Karl Kendrick Chua noted call center agents would only pay P1,567 in personal income tax (PIT) under a reformed tax system.

The existing tax rates require call center agents earning P21,000 a month to pay P34,209 in PIT, even if after filing for a personal exemption of P50,000, with their 13th month pay and other benefits exempted from taxes.

“This is because under the new DOF-proposed system, those earning P250,000 but not over P400,000 will only have to pay 20 percent of the amount in excess of P250,000 as personal income tax in the first year of implementation,” Chua said.

The tax plan includes a proposal to adjust the fuel excise tax and expand the value-added tax (VAT) base to plug the massive leakages expected under a new tax regime.

"Taking into account the additional VAT that they would pay annually for goods and services, which is about P3,096, and the effect of a fuel excise tax adjustments on their expenses, which the DOF estimates at P1,522, their net savings would amount to P28,024," the department said.

Assuming a worker commutes to work, the savings would include an indirect subsidy of P1,500 because "the impact on transport fares would only be minimal as a result of the cash cards that would be given to drivers and operators of public utility vehicles to offset the increase in fuel excise."

Factoring in an additional P1,500 indirect assistance brings the net savings to P29,524 a year, the DOF noted.

A total of 447,181 individual taxpayers earning more than 250,000 but not over P400,000 would pay a lower income tax under the proposed tax reform measure submitted to the Congress on September 26, it said.