Gov’t to lower taxes for Filipino freelancers
The House Committee on Ways and Means is now working with the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to lower the withholding tax on Filipino freelancers employed by US-based companies.
Rep. Joey Salceda, the committee’s chairman, explained that income received by Filipino freelancers and content creators that American firms employ pay 30% tax within the US.
“We don’t get any of that tax, and our tax rates are, of course, much lower for personal income,” Salceda added.
The Representative also cited that basic taxes will be reduced by five per cent starting January 1, 2023, as a provision of the Train Law.
This will allow freelancers to save around 10% of their income if they get taxed at Philippine rates instead of US rates. “That’s as much as P200,000 (US$3,420) more that they can provide their families.” Salceda stated.
The committee chairman estimated that the Philippines could also earn as much as P26 billion (US$444 million) in revenues, as opposed to the US making as much as P75 billion ((US$1.28 billion) in taxes from Filipino freelancers.
“It will mean higher take-home pay for freelancers—a new revenue stream for the Philippines—and we will be better able to protect freelancers as well.”
