The Tax Management Association of the Philippines (TMAP) reports that in all of the ASEAN region the Philippines is the country with the highest income tax. They’re currently in the process of appealing to the Congress to cut down the tax rate for Filipinos.
Rina Manuel, President of TMAP, mentioned that now is the time to lower the tax bracket or amend it to make it equitable. “Corporations are only subjected to 30% tax rate while individuals are taxed 32%. Ang corporations may deductions pa, while ang empleyado personal exemptions lang at additional for the Children,” Manuel voiced out.
Philippine tax vs. other SEA countries (for Php500,000 income):
Philippines: 32% income tax
Vietnam: 20% income tax
Cambodia: 20% income tax
Laos: 12% income tax
Malaysia: 11% income tax
Thailand: 10% income tax
Singapore: 2% income tax
Brunei: 0% income tax
In addition, TMAP is also proposing that minimum wage workers should be exempted from paying tax, so long as they are truly earning minimum wage salary. If there is additional income (no matter how small in excess of the minimum wage) then it qualifies to be taxed by the government.
The side of Bureau of Internal Revenue (BIR) gave a warning that smaller tax collections would affect government spending used to “drive economic growth”. They said that along with the reduction of tax there should also be reduction of revenue goal.
“So if the final decision is to reduce tax rates, you cannot expect the BIR to collect from air, you will have to reduce the revenue goal. It is like a household, if someone decide to stop working, you cannot keep on spending the way you use to do because eventually you will go bankrupt or you do not expect people to keep on lending to someone who is a credit risk,” BIR said.