As we take on the last month of 2022 and embrace a new year, a fresh set of tax updates is also coming our way. In 2023, we will see various changes in our tax system brought by the Tax Reform for Acceleration and Inclusion (TRAIN) Law under the Comprehensive Tax Reform Program.
First on the list is the updated tax table for individual income tax. Individual taxpayers will have something to look forward to in the coming year as they will be subject to lower tax rates as provided below:
The new tax table, effective January 1, 2023, still exempts taxpayers having a net taxable income of not over P250,000 and continues to subject taxpayers with over P8,000,000 net taxable income to 35%. However, taxpayers in between who are previously taxed at 20% to 32% will benefit from the lower tax rates as they are now subject to 15% to 30% depending on the tax bracket they belong.
Also, by 2023, filing of the Monthly VAT Return or BIR Form 2550M is not anymore required. In other words, VAT-registered companies will only be filing four (4) VAT returns for the year pertaining to BIR Form 2550Q or Quarterly VAT Return instead of the usual twelve (12) returns. It will still be due within 25 days following the close of each taxable quarter.
Truly, the upcoming year is promising. But before all that, we wish everyone a happy holiday.
Please be guided accordingly.
P&A Grant Thornton
Certified Public Accountants
P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd.
As published in SunStar Cebu, dated 15 December 2022