TMAP asks Congress to rectify personal income tax system

MANILA, Philippines - The Tax Management Association of the Philippines (TMAP) has asked Congress to pass by the end of the year various bills that would rectify the country’s personal income tax system.

In a letter to the ways and means committee of the House of Representatives, the TMAP called on legislators to ensure the swift passage of much-needed tax reform laws to widen the tax base, improve compliance among taxpayers and boost tax collections.

The TMAP said the passage of these measures should be prioritized with urgency and be made to take effect by taxable 2015.

These measures include increasing the P30,000 tax exemption threshold for 13th month pay, bonuses and other benefits.  This bill recently passed the second reading in the House of Representatives and is expected to smoothly pass its third reading.

TMAP also wants lawmakers to give priority to a proposal seeking to update the income tax brackets to their current values, with an automatic provision that will allow indexation against changes in the consumer price index (CPI) every three years.

It reiterated its proposal to lower the 32 percent top individual tax rate to between 20 and 30 percent to promote equity in the tax system and bring the Philippine workforce at par with its neighboring countries.

“It will also help bridge the gap in the taxation of overseas Filipino workers who are tax exempt, vis-à-vis those who choose to stay and work in the country,” TMAP said.

The organization likewise sought the review and simplification of the tax system for self-employed individuals and professionals and marginal income earners to ease the burden of compliance.

TMAP is an association of tax consultants and corporate tax practitioners, which aims to professionalize tax practice and provide a channel by which the private sector may actively participate in the drafting of tax laws, rules and regulations.– With Ted Torres