House panel approves tax on diesel, lower income tax
May 4, 2017 at 09:12
House panel approves tax on diesel, lower income tax
Albay Rep. Joey Salceda, senior vice chairman of the committee, said the panel voted 17-3 with three abstentions to approve the bill. PPP Center/File
MANILA, Philippines – The House of Representatives committee on ways and means approved yesterday a consolidated bill imposing a P6 diesel tax and increasing levies on other oil products and on cars.
The measure also seeks to reduce personal income tax.
Albay Rep. Joey Salceda, senior vice chairman of the committee, said the panel voted 17-3 with three abstentions to approve the bill.
He said they also incorporated in the measure the proposed tax on soft drinks and other sugar-sweetened beverages.
The bill contains the so-called tax reforms proposed by the Department of Finance (DOF).
Under the DOF proposal, the diesel tax and increased levies on other oil products and on cars would be imposed starting July 1 this year.
However, it is unlikely the proposed tax reform law would be enacted by that time.
The bill endorsed by the committee on ways and means calls for the imposition of an initial P3 tax on diesel.
The levy would increase by P2 to P5 on Jan. 1, 2018 and to P6 starting on Jan. 1, 2019.
At present, there is no excise tax on diesel.
The measure would also increase the tax on lubricating oils and greases, waxes, regular gasoline, leaded gasoline, unleaded gasoline and aviation gas to a uniform P7 per liter, going up to P9 in 2018 and P10 in 2019.
The present tax on these products ranges from P3.50 to P5.35.
As for the reduction in personal income tax, those earning up to P250,000 a year would pay no tax.
Those with income of between P250,000 and P400,000 would pay a tax of 25 percent of the amount in excess of P250,000.
Those with income of more than P400,000 up to P800,000 would have a tax of P30,000, plus 25 percent of the excess over P400,000. Those earning from P800,000 to P2 million would pay P130,000 plus 30 percent of the excess over P800,000, while those with income of P2 million to P5 million would pay P490,000 plus 32 percent of the excess over P2 million.
Those earning over P5 million would pay P1.450 million plus 35 percent of the excess over P5 million.
Under the present law, those earning over P500,000 after maximum deductions of P200,000 for a working couple pay an income tax of P125,000 plus 32 percent, which is the maximum rate, of the excess over P500,000.
The tax on cars, including sport utility vehicles, worth up to P1.1 million would go up by 100 percent.
Those worth between P1.1 million and P2.1 million would be assessed a tax of P224,000 plus 100 percent of the excess over P1.1 million, while those valued at more than P2.1 million would be levied P1.224 million plus 200 percent of the excess over P2.1 million.
