Most middle-income taxpayers can expect to have higher take-home pay starting this year courtesy of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, said Senator Win Gatchalian who helped in crafting the law.
Starting 2023, taxpayers earning more than P250,000 a year but not over P8 million will be subject to lower income tax rates ranging from 15% to 30% from 20% to 32% previously, as provided by Republic Act No. 10963, also known as the TRAIN law, he said.
For instance, a public school teacher categorized as Teacher 1 with a monthly salary of P27,000 or Salary Grade (SG) 13 who has an annual income of P351,000 will now have monthly tax savings of P420.83 or P5,050 for the entire year. A public hospital nurse categorized as Nurse III or SG 17 who has an annual income of P559,390 or P43,030 monthly will now have monthly savings of P1,289.13 or annual tax savings of P15,469.5.
“Inaasahan natin na lalo pang lalakas ang domestic consumption na may malaking kontribusyon sa paglago ng ating ekonomiya. Dahil sa pinababang buwis, mas mataas ang take-home pay ng mga empleyado na magiging malaking tulong sa gitna ng mataas na presyo ng mga bilihin,” Gatchalian said.
Take the case of a sales and marketing junior executive with a monthly salary of P22,500 or an annual income of P292,500. His/her savings of P2,125 yearly or P177.08 monthly can buy him/her 2.5 kilograms of regular milled rice and 12 eggs estimated to be worth P176.50. Gatchalian also cites the case of an information technology junior executive who earns P45,000 monthly or P585,000 yearly. Additional food items can be bought with an additional monthly savings of P1,395.83 or P16,750 annually.
“Dahil sa mas mataas ang kanilang kita, inaasahan din natin na magiging maganda itong insentibo para sa mga empleyado na lalo pa nilang paghusayan ang kanilang trabaho at magtulak sa kanila para mag impok o kaya ay mamuhunan,” Gatchalian said.
Meanwhile, individual taxpayers with annual taxable income amounting to P250,000 or below will continue to be exempt from paying income tax.