Individual taxpayers are looking forward to a lower tax rate and better take-home pay in 2023.
What could be the best way to start the year than to know that your tax is now lower and you will be able to take home a bigger pay?
There are various changes in our tax system in 2023 brought by the Tax Reform for Acceleration and Inclusion (TRAIN) Law under the Comprehensive Tax Reform Program that took effect in 2018.
One of the most welcome change is the amendment to the Income Tax Rate for Individual (Section 24 of the National Internal Revenue Code (NIRC) that subjects the taxpayers to a lower rate as shown in the table above. You can click the image to download a PDF version.
The new tax table that will be used effective January 1, 2023 will most benefit those taxpayers who are in between the P250,000 mark and P8,000,000 net taxable earnings. These are the individuals that are previously taxed at 20% to 32%. In the new tax table, the rate is lowered to 15% to 32% depending on the tax bracket they belong.
Below is the withholding tax table updated for 2023 onwards that can be used as reference in computing the withholding taxes on compensation. You can download the PDF if you click the image.
The upcoming year is truly promising as there are other changes that will promote ease in doing and computing taxes. Let’s welcome the New Year with cheers!
“Make sure you pay your taxes otherwise you can get in a lot of trouble.”
-Josh Kaufman
Note: The content of this article may become outdated over time due to changes in the rules and regulations. There may be a need for you to consult your accountant, lawyer, or tax professional for proper guidance.
Socorro L. Abadier is the founder of SGL Accounting and Business Solutions. Before establishing her practice, she worked as an Internal Auditor and Branch Manager at one of the major banks in the Philippines and as an External Auditor of one of the top 4 Accounting firms in the Philippines.