IN line with Republic Act (RA) No. 10963, also known as the “Tax Reform for Acceleration and Inclusion (TRAIN)”, the Bureau of Internal Revenue (BIR) has circularized the revised withholding tax table through its Revenue Memorandum Circular (RMC) No. 105-2017.
The revised table should be used in computing the withholding tax to be deducted on every payment of compensation to employees effective Jan. 1, 2018 to Dec. 31, 2022.
By Jan. 1, 2023, revised individual income tax rates will take effect.
Unlike the previous table, the revised table shows standardized withholding tax rates, considering the repeal of the personal and additional exemptions for purposes of computing the individual income tax, as shown above.
Under the TRAIN, the tax-exempt bracket in the schedule of annual income tax rates is P250,000. The tax-exempt threshold for 13th month pay and bonuses, on the other hand, is now at P90,000.
Please be guided accordingly.
Source: P&A Grant Thornton
As published in SunStar Cebu dated 9 January 2018.