The Bureau of Internal Revenue (BIR) Commissioner Caesar Dulay has issued Memorandum circular 105-2017 revising the withholding tax table on compensation.
TRAIN Law
Under Republic Act 10963, also known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which reduces personal income tax but imposes a higher tax on fuel, cars, tobacco and sugary beverages to bankroll President Duterte’s government infrastructure and development projects.
RA 10963 or the TRAIN Law was signed by President Rodrigo Roa Duterte last December 19, 2017 vetoing previous provisions. This seeks to lower income tax contribution of private individuals for a higher take home pay to benefit their families.
Commissioner Dulay stated that, “with the effectivity of the TRAIN Law on January 01, it is imperative that a smooth transition to withholding tax rates is ensured”.
He further stressed on his memorandum addressing that every employer making compensation payments to their respective employees, should deduct and with hold from such compensation a tax determine in accordance with the revised withholding tax table.
Comprehensive Tax Reform Program
The TRAIN Law contains the first package of the Comprehensive Tax Reform Program (CTRP) of the Department of Finance. And based on projected estimates, the law is expected to generate in 2018 about P82.3 Billion or equivalent to two thirds of the projected P134 Billion under the proposed bill.
The remaining one third of the propose tax amnesty program comes from adjustment in Motor Vehicle User Charge and amendments to the bank Secrecy Law which is expected to be passed by Congress in 2018th first quarter.
Public discussiions/consultations
Dulay urges taxpayers to participate in public consultations of the issues and briefing wherein everone could have the chance to air his/her opinions, views and recommendations. Public consultation will be held on January 11 and 12 prior to the issuance of the regulations on income tax, withholding tax, value added tax, excise tax on petroleum, excise tax on automobiles, excise tax on mineral products, excise tax on sweetened beverages, cosmetic procedures, estate and donors tax, percentage tax, and documentary stamp tax as well as memorandum order (RMO)on the VAT Refund System.
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