DoF backs income tax exemption for workers

[wowiesy]

DoF backs income tax exemption for workers
By Lawrence Agcaoili
source: http://www.manilastandardtoday.com/?...s04_jan07_2006


Finance Secretary Margarito Teves yesterday urged Congress to pass a law that would exempt minimum wage earners from paying taxes on their annual income.

Teves said the Bureau of Internal Revenue has issued Revenue Regulation 1-2006 directing employers not to withhold tax from 365,660 private sector workers earning less than P5,000 a month and 51,872 government workers with salary grades 1 to 3 starting Jan. 1, 2006.

Teves explained that the BIR collects about P600 million from minimum wage earners a year, less than 1 percent of the total compensation income collected by the agency.

The finance chief said the exemption of minimum wage earners from income tax is one of the administrative measures being implemented by the government to cushion the impact of Republic Act 9337 or the Expanded Value Added Tax Act of 2005.

“We hope that this immediate financial relief from the withholding tax will help our minimum wage earners cope with the possible inflationary effects due to the new expanded VAT,” Teves stressed.

The new regulation revised RR 2-1998, which allowed employers to either withhold taxes from take home pay but exempt minimum wage earners from filing their income tax return (ITR), or not to withhold tax on the condition that the employee files his or her ITR and pay the corresponding tax due.

However, he was quick to clarify that minimum wage earners whose take home pay would no longer be withheld would have to pay their ITRs and pay the corresponding taxes due on or before April 15 of the following taxable year.

According to Teves, Congress still has to pass a law that would amend the National Internal Revenue Code of 1997 to permanently exempt minimum wage earners from income taxes.

“To give permanence to that benefit, we are hoping that our colleagues in Congress will file and approve a bill to permanently exempt the minimum wage earners from paying income tax,” he said.

According to him, both the Senate and the Lower House have the entire 2006 to deliberate and pass a bill that would permanently exempt minimum wage earners from paying income taxes.

Under the current income tax regime, an individual earning below P10,000 annually has to set aside at least 5 percent of total income for taxes while anyone receiving more than P500,000 net with allowable personal exemptions and mandatory social security payments has to pay as high as 32 percent worth of taxes.

On the part of the employer, the finance chief explained that employers who would no longer withhold income tax from minimum wage earners would continue to be allowed to deduct the compensation income from the gross incomes of their employees.

[wowiesy]

DoF backs income tax exemption for workers
By Lawrence Agcaoili
source: http://www.manilastandardtoday.com/?...s04_jan07_2006


Finance Secretary Margarito Teves yesterday urged Congress to pass a law that would exempt minimum wage earners from paying taxes on their annual income.

Teves said the Bureau of Internal Revenue has issued Revenue Regulation 1-2006 directing employers not to withhold tax from 365,660 private sector workers earning less than P5,000 a month and 51,872 government workers with salary grades 1 to 3 starting Jan. 1, 2006.

teka teka... Php 5,000.00 a month? 5000 pesos / 26 days (in a month) = 192.31 Pesos / day na pala ang minimum wage ngayon?

ewan!

[mazdamazda]

teka teka... Php 5,000.00 a month? 5000 pesos / 26 days (in a month) = 192.31 Pesos / day na pala ang minimum wage ngayon?

ewan!

sa provinces, ganyan talaga ang minimum wage. mga manager / president nga dun wala pang 20K ang sweldo.

pero sa P5000/month na kita sa probinsya eh buhay ka na. d2 lang sa manila magastos at ang daming unnecessary spendings (tulad ng cellphone). ang mga tao.

[wowiesy]

sa provinces, ganyan talaga ang minimum wage. mga manager / president nga dun wala pang 20K ang sweldo.

pero sa P5000/month na kita sa probinsya eh buhay ka na. d2 lang sa manila magastos at ang daming unnecessary spendings (tulad ng cellphone). ang mga tao.

aware naman tayo na talagang mas mura sa province... sa manila.. kahit na medyo mataas na ang minimum wage... but the junior managerial positions pay scale ay hindi din ganun kataas... i think at SM eh junior managerial level eh wala pa atang 20k or something...

ang punto ko dito is that, if you scan through the current minimum wage rates across the country, most of the sectors that will benefit from this ay yung mga workers in agriculture sectors.. which, i would assume ay talaga namang hindi na nag wi-withhold... sa mga regions na matataas ang minimum wage... this regulation is worthless...

although i see the point of DoF din... kung minimal nga lang naman ang maaapektuhan sa regulation na to, hindi sila gaanong mahihirapang i cover yung hindi makokolekta dito with other revenue generating measures...

feeling ko lang kasi talaga na this regulation is all for show and with no substantial effect on the people...

[oldblue]

kung sino pa yun mga tao na dapat turuan na rumespeto sa gobyerno, yun pa ang i-exempt. tax payment is a responsibility ng lahat ng earning citizens kahit pa maliit lang sahod nila.

if they really want to help the minimum wage earners, i-lobby nila itaas ang salary para mas may purchasing power mga maliliit.

economically, mas matipid kasi yun gayan strategy kaysa itaas sweldo pero will this benefit all of us in the long run? i dont believe in economic leaders talaga. pera na lang pang-tapat, either cut cost or dagdag singil. empower the people, yan ang dapat na leader ng bansa. leave the economics to hired help.