Daily TribuneTo maintain progressivity, BIR said the top individual taxpayers whose annual taxable income exceeds P8 million had imposed a higher tax rate of 35 percent from the previous 32 percent.
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Individuals earning compensation income, including those from non-business and non-profession-related income, can look forward to higher take-home pay in 2023, the Bureau of Internal Revenue said on Friday.
BIR said the higher take-home pay is per Republic Act 10963, the Tax Reform for Acceleration and Inclusion Law, which took effect on 1 January 2018.
"Under the TRAIN Law, starting 1 January 2023, those with annual taxable income below P250,000.00 are still exempt from paying personal Income Tax," BIR said in an advisory.
"(The) rest of taxpayers, except those with taxable income of more than P8 Million, will have lower tax rates ranging from 15 percent to 30 percent by 2023," BIR added.
To maintain progressivity, BIR said the top individual taxpayers whose annual taxable income exceeds P8 million had imposed a higher tax rate of 35 percent from the previous 32 percent.
BIR said the new annual income tax rates for Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Related Income significantly decreased by five percent for those with taxable income of more than P250 thousand up to P2 million compared to the Income Tax rates imposed during the initial implementation of the TRAIN Law in 2018.
The Tax Bureau also noted a two percent decrease in the tax rate for those individuals with taxable income of more than P2 million up to P8 million pesos.
"With the said reduction in the annual Income Tax rates, Individuals Earning Purely Compensation Income will have lower withholding tax deductions from their monthly salary, thereby increasing their take-home pay," Commissioner Romeo D. Lumagui, Jr. said.
