Being the largest source of government collection, the income tax system will play a crucial role in realizing the government’s target collection. From January 1, 2018 to December 31, 2022, the income tax rates for individual taxpayers will be replaced with 0 percent-35 percent progressive tax rates, from the existing 5 percent-32 percent graduated tax rates, with the number of tax brackets reduced from seven to six, and thresholds for each tax bands adjusted. In addition, for mixed income earners, their compensation income shall still be subject to graduated income tax rates. Otherwise, there is no option to avail of the 8 percent tax rate and all income shall be subject to graduated income tax schedule. In terms of filing of the income tax returns, the new law mandates that individual and corporate income tax returns shall consist of only four pages.

Source: Manila Times December 24, 2017 16:07 UTC