Wednesday, June 18, 2008

Gloria signs tax exemption law for minimum wage earners

I’ve heard it in the evening news yesterday without much impact but everybody is talking about it in the office, President Arroyo signed into law Republic Act 9504 or the Tax Exemption law for minimum wage earners. Indeed, this is a great news at this time of crisis. And for me, this is the only law passed by this administration that they can be proud of (To think that the key authors like Senator Francis Escudero and Mar Roxas are from the opposition). We’re not actually expecting exemption from paying income tax, this is just for minimum wage earners. But this law also increases personal exemptions for other salaried employees like me.

It is estimated that this new law will provide additional take-home pay of P34 a day or P750 a month for minimum wage earners.

What we have been talking in the office is that under this new law, all holiday, night differential, hazard and overtime pay will also be tax exempt, both from the private and government sectors. Certainly, this is something that we can smile about.

The new law increases the personal exemption of single taxpayers from P20,000 to P50,000; head of family, P25,000 to P50,000; and married, P32,000 to P50,000. The deduction for each qualified dependent, not exceeding four, is increased from P8,000 to P25,000.

Sen. Escudero, one of the principal authors of the measure, said the government stands to lose P14.25 billion yearly in tax collections from the new law including P3.16 billion from minimum wage earners and P11.09 billion for additional exemptions.

Sen. Roxas II said that under the new law, an employee earning P455 per day or P10,010 per month would have an additional take-home pay of P472.59 per month or P5,671.02 a year if unmarried; P678.50 per month or P8,142.04 a year as head of the family; and P580.92 per month or P6,971.02 a 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 a year if unmarried; P1,307.18 per month or P15,686.20 a year as head of the family; and P1,190.52 per month or P14,286.20 a year for those married with four children.

Indeed, the workers could spend the additional money on the family’s needs such as food, medicine and tuition, especially with the rising cost of fuel and basic commodities.


alf said...

at least i read something good for the filipino earners.

Filipino in Canada said...

wow!! that IS good news! i'm sure everyone appreciated that move.

Filipino in Canada


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