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Philippines: New tax law takes effect today
MANILA, Philippines — The tax reform law, which reduces personal income tax but imposes a higher tax on fuel, cars, tobacco and sugary beverages to bankroll the government’s infrastructure and development projects, takes effect today.
To kick off the effectivity of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Revenue Commissioner Caesar Dulay has issued Memorandum Circular 105-2017 revising the withholding tax table on compensation.
“With the effectivity of the TRAIN law on Jan. 1, it is imperative that a smooth transition to withholding tax rates is ensured,” he said.
Dulay stated in the memo that every employer making compensation payments to their respective employees should deduct and withhold from such compensation a tax determined in accordance with the revised withholding tax table.
Dulay is also urging taxpayers to participate in discussions of the issue in public consultations and briefings where they can air their views, comments and recommendations.
President Duterte signed the TRAIN Law last Dec. 19, vetoing certain items.
The public is encouraged to seek clarifications on certain provisions of the law with the national, regional, and district offices of the Bureau of Internal Revenue (BIR) to help the various committees in crafting the Implementing Rules and Regulations.
“The committees are drafting the Implementing Rules and Regulations of the law. The members are also set to conduct internal and external briefings nationwide to make way for the hassle-free implementation of the law,” the agency said.
The BIR will hold public consultations on Jan. 11 and 12 prior to the issuance various revenue 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 tobacco, excise tax on sweetened beverage, cosmetic procedures, estate and donor’s tax, percentage tax, and documentary stamp tax as well as a revenue memorandum order (RMO) on the VAT refund system.
The TRAIN Law contains the first package of the Comprehensive Tax Reform Program (CTRP) of the Department of Finance, Based on estimates, the law is expected to generate about P82.3 billion in 2018, or about two-thirds of the P134 billion originally intended under the proposed bill.
The remaining one-third involving the proposed tax amnesty program, adjustments in the Motor Vehicle Users Charge, and amendments in the bank Secrecy Law, is expected to be passed by Congress in the first quarter of 2018.
Finance Secretary Carlos Dominguez III said proceeds of the first package of tax reforms would fund about 25 percent of the P8.4 trillion Build Build Build program of the Duterte administration.
Source: http://www.philstar.com/business/2018/01/01/1773445/new-tax-law-takes-effect-today