Wednesday, June 18, 2008

Good News for Minimum Wage Earners!

This is the first good news I have read in many years! I practically just read the entertainment section whenever I grab the morning spreadsheets. The news today has it also that Ces Drilon was finally released by her captives. Whether ransom was paid, it is not yet confirmed. Oh well, I hope she and her team learns from this ordeal. What I am afraid of is that if ransom was paid, then this will further encourage terrorists to do their thing.

Anyway, here is todays top news:

By Abigail Kwok
First Posted 11:23:00 06/17/2008

MANILA, Philippines - (UPDATE) President Gloria Macapagal-Arroyo has signed into law a bill that would exempt minimum wage earners from paying income tax and increasing personal exemptions for other employees.

Arroyo signed in MalacaƱang Tuesday Republic Act 9504 or an act amending Sections 22, 24, 34, 35, 51, and 79 of RA 8424 or the National Internal Revenue Code of 1997.

Senators Manuel Roxas, Francis Escudero, Juan Ponce Enrile, and Ramon "Bong" Revilla Jr. and Speaker Prospero Nograles were present during the signing.

The law aims "to provide financial relief to taxpayers in cognizance by the government of the hard times brought by multiple factors, including the current rice crisis, oil price hikes and the heightening inflationary pressure on commodities of all kinds and to help reduce the wide tax gap in the taxation of self-employed and professionals," according to the five-page document released to media.

Senator Manuel Roxas, principal author of the measure, said the new law would "provide relief to our workers by increasing their take home pay."

He added that the law would allow minimum wage earners to take home as much as P750 a month or from P33 to P35 a day.

"A worker in Metro Manila earning P7,900 a month will now have an additional P750 of take-home pay per month, or P34 per day. He can now spend this additional money for his needs or for his family's needs, such as food, medicine, and the tuition fee of his children, among other uses," Roxas said.

But apart from tax exemption for minimum wage earners, the law will also provide for an increase in the personal exemption of all taxpayers.

From the current P20,000 personal exemption for single taxpayers, P25,000 for head of family, and P32,000 for married individual, the tax exemption will be fixed at P50,000, Roxas said.

The additional exemption for dependents will increase from P8,000 to P25,000, he said.

The senator added that all holiday, night differential, hazard, and overtime pay would also be tax-exempt.

He added that the aim of both the House of Representatives and Senate was not only to increase tax exemption for workers but also to provide relief for minimum wage earners.

"The House focuses on increasing the exemption while I focus on minimum wage," he said.

"We have fought for this for a long time. Many Labor Days have come and gone wherein we fought for this for our workers, and at last, income tax exemption of minimum wage earners is now a law," said Roxas in an interview Monday.

For other salaried workers, the measure would allow an employee earning P455 per day or P10,010 per month to have an additional take-home pay of P472.59 per month or P5,671.02 per year if unmarried; P678.50 per month or P8,142.04 per year as head of the family; and P580.92 per month or P6,971.02 per year for those married with four children.

An employee earning P683 per day or P15,026 per month would have an additional take-home pay of P545.26 per month or P6,543.10 per year if unmarried; P1,307.18 per month or P15,686.20 per year as head of the family; and P1,190.52 per month or P14,286.20 per year for those married with four children.

Although the government is expected to lose around P14 billion a year with the new law, the government hopes to recover this through the optional standard deductions (OSD), which will "simplify the filing of income tax returns and benefits, in particular, professionals and medium, small, and micro entrepreneurs," according to the law.

The OSD will rake in P15.03 billion tax revenues annually.

The law is said to take effect 15 days after its publication in a national newspaper.