An Act Instituting Income Tax Reform For Corporate Taxpayers, Amending For This Purpose Sections 27(A) And 28 Of The National Internal Revenue Code Of 1997, As Amended

• This bill seeks to amend Sections 27(A) and 28 of the NIRC, as amended, to replace the unitary or single income tax rate with a graduated income tax schedule for corporate taxpayers similar to those provided for the individual taxpayers. The basis for adopting this tax system is to align income taxation for corporations with the constitutional mandate of a progressive system of taxation and the rule on uniform and equitable taxation. 
• Also, this bill seeks to lower the corporate income tax rate from the current unitary or single income tax rate of 30% with graduated rates ranging from 5% to 25%:

TAXABLE INCOME                                   TAX RATE

“NOT OVER P400,000                      …    5%

“OVER P400,000 BUT                       …    P20,000 + 10% OF THE 

  NOT OVER P800,000                              EXCESS OVER P400,000

“OVER P800,000 BUT                         …   P60,000 + 15% OF THE 

  NOT OVER P2,000,000                           EXCESS OVER P800,000

“OVER P2,000,000 BUT                    …  P240,000 + 20% OF THE 

  NOT OVER P8,000,000                       EXCESS OVER P2,000,000

“OVER P8,000,000                       …  P1,440,000 + 25% OF THE     

                                                     EXCESS OVER P8,000,000

• It is noteworthy that this proposed measure seeks to provide a uniform graduated income tax schedule for individual and corporate taxpayers. The intent is to simplify income taxation for all taxpayers and to make the same easier to comprehend. 

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