Escape from

Taxation
1.) Evasion or Dodging, the taxpayer uses
unlawful means to evade or lessen the payment
of tax.
2.) Avoidance, also called tax minimization, it is
the reduction or totally escaping payment of tax
through legally permissible means.
3.) Shifting, basically it is transfer of tax burden
to another. The imposition of tax is transferred
from the statutory taxpayer to another without
violating the law.
Basic Income Tax
 Use the graduated tax rate or tax table, as
amended
 Income subject to basic tax are:
Ordinary income
Passive income derived abroad by RCs
Capital gains not subject to CGTs
Income subject to basic tax is reflected in the
income tax return of the tax payer.
Generally subject to creditable withholding
taxes which may be deducted from the basic
income tax due.
 It is the payee (income earner) who has the
responsibility to file the return and pay the
applicable tax.
 PRIOR to 2018
Income Tax
Not over 10,000 5%
Over 10,000.00 but not over 500.00 + 10% in excess of 10,000.00
30,000.00
Over 30,000.00 but not over 2,500.00 + 15% in excess of
70,000.00 30,000.00

Graduated Over 70,000.00 but not over

140,000.00
8,500.00 + 20% in excess of
70,000.00
Tax Rate
Over 140,000.00 but not over 22,500.00 + 25% in excess of
250,000.00 140,000.00

Over 250,000.00 but not over 50,000.00 + 30% in excess of

500,000.00 250,000.00

Over 500,000.00 125,000.00 + 32% in excess of

500,000.00
 TRAIN LAW – TAXABLE YEAR 2018-2022 2023 onwards
Income Tax Tax
Not over 250,000.00 Exempt Exempt
Over 250,000.00 but 20% of excess over 15% of excess over
not over 400,000.00 250,000.00 250,000.00

Over 400,000.00 but 30,000 + 25% in excess 22,500 + 20% in excess

not over 800,000.00 of 400,000.00 of 400,000.00
Over 800,000.00 but 130,000 + 30% in excess 102,500 + 25% in excess
not over 2,000,000.00 of 800,000.00 of 800,000.00

Over 2,000,000.00 but 490,000 + 32% in 402,500 + 30% in excess

not over 8,000,000.00 excess of 2,000,000.00 of 2,000,000.00

Over 8,000,000.00 2,410,000 + 35% in 2,205,500 + 35% in

excess of 8,000,000.00 excess of 8,000,000.00
 Provided, that after 2020, the taxable income
tax levels in the above schedules shall be
adjusted once every five (5) years, through
rules and regulations issued by the
Department of Finance, upon
recommendation of the Commissioners, after
considering among others, the effect of the
same of the 5- year cumulative inflation rate.