Social taxes
Social taxes in the Philippines consist of contributions to the following government agencies:
- Social Security System (SSS)
- Philippine Health Insurance Corporation (PhilHealth), and
- Home Development Mutual Fund (HDMF)or Pag-IBIGFund
HDMF has issued Circular No. 460 on 15 January 2024 prescribing the increase in contribution effective February 2024. Based on the circular, the Maximum Fund Salary (MFS) increased from PHP5,000.00 toPHP10,000.00. The rate for MFS of PHP1,500 and below shall be 1% for the employee and 2% for the employer. For MFS over PHP5,000, the rate shall be 2% for both the employer and the employee. The maximum HDMF contribution for both employers and employees will be PHP200.
In addition, PhilHealth has not issued any official statement that would defer the increase in premium rates for the calendar year 2024. In a press conference held on 12 January 2024, the President and Chief Executive Officer of PhilHealth has confirmed that the premium rate will increase from 4% to5% and the income ceiling from PHP80,000 to PHP100,000 which is in accordance with Section 10 of the UniversalHealth Care (UHC) Law, as implemented by PhilHealth Circular 2019-009.
In line with this, minimum and maximum PhilHealth contribution for both employers and employees will be PHP500 and PHP2,500, respectively, effective January 2024.
Tax filing and payment
Following the enactment of Republic Act No. 11976 (Ease of Payment Taxes or EOPT Act) on 5 January 2024, which took effect on 22 January 2024, the Commissioner of Internal Revenue (CIR) may require filing of return through any authorized agent bank, revenue district office and authorized tax software provider of the BIR (file-and-pay anywhere mechanism). The taxes shall be paid either electronically or manually at the time when the tax return is filed.
Further, a Filipino citizen who is an Overseas Contract Worker (OCW) or an Overseas Filipino Worker (OFW) working and deriving income solely from abroad shall not be required to file an income tax return.
The implementing rules and regulations (IRR) will be issued within 90 days from the effective date of the Act which may include clarifications on individual taxation.
Business tax
Pursuant to Republic Act (RA) 11534, also known as the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), any person whose sales or receipts are exempt from the payment of value-added tax (VAT) and who is a non-VAT registered person shall pay a percentage tax equivalent to 1% of one's gross sales or receipts (previously 3%) for the period beginning 1 July 2020 until 30 June 2023. Starting 1 July 2023, the rate shall revert to 3%.
