PH workers’ taxes to be reduced in 2023
MANILA, PHILIPPINES — The personal income taxes of Filipino workers will be reduced starting January 1, 2023, in accordance with the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
Under the law, individuals earning purely from compensation income whose taxable earnings are less than P8 million (US$143,481) yearly will have lower tax rates ranging from 15% to 30%.
On the other hand, taxpayers whose annual taxable income exceeds P8 million will have a higher tax rate of 35% from the previous 32%.
Meanwhile, Filipinos earning below P250,000 (US$4,483) are still exempt from paying personal income taxes.
The new annual income tax rates have reduced taxes by 5% for those earning over P250,000 and P2 million (US$4,483 and US$35,848).
At the same time, Filipino workers whose taxable income falls over P2 million but not greater than P8 million saw a 2% decrease in personal income tax.
Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr said the reductions would increase Filipino employees’ take-home pay.
However, despite the good news, critics repeatedly emphasized that the TRAIN Law is a burden to poor Filipinos who are already tax-exempt before its implementation, as it came with increased prices of goods and services in the country.
