Income tax outlays drop starting Jan.

The key reform initiative in the previous regime called Tax Reform for Acceleration and Inclusion law or Republic Act 10963 made the tax system simpler and fairer starting 1 January 2023, Finance Secretary Benjamin Diokno said on Wednesday.

"The Train law adjusted personal income taxes and fixed the inequity in the tax system. We want our taxpayers to reap the fruits of their labor while enabling them to contribute their fair share to national development," Diokno said in a statement.

35% for big earners
The Department of Finance chief said individuals with an annual taxable income below P250,000 are still exempted from paying personal income taxes under the adjusted tax rates.

The revised tax schedule reduces personal income taxes for those earning P8 million and below, compared to the initial tax cuts for 1 January 2018 to 31 December 2022.

"Meanwhile, to keep the tax system progressive, the tax rate for individuals earning P8 million and above annually will be maintained at 35 percent," Diokno added.