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Jun 18, 2008

New Tax Exemption - I Like It!!

MANILA, Philippines – President Gloria Macapagal Arroyo on Tuesday morning signed into law the measure that will exempt minimum wage earners from paying income tax and increase personal exemption for other employees.

A radio report said President Arroyo signed Republic Act 9504 or the act amending several sections of RA 8424 otherwise known as the National Internal Revenue Code of 1997.
Workers who used to earn the minimum wage of P382 a day will begin taking home as much as P35 a day or around P700 a month, according to Sen. Francis Joseph “Chiz" Escudero, who turned up at the signing to represent the higher chamber of Congress.
Escudero chairs the Senate committee on ways and means.

Also present at the signing were Rep. Exequiel Javier, Escudero’s counterpart at the House of Representatives as well as Senators Juan Ponce Enrile and Manuel "Mar" Roxas III.

Senator Roxas, principal author of the Senate’s version of the measure, earlier said that all holiday, night differentials, hazard and overtime pays will also be tax exempt.

The new law increased to 50,000 all individual exemptions, which previously stood at P20,000 for single workers, P25,000 for a head of the family, and P32,000 for married individuals.

Additional exemptions for up to four qualified dependents were likewise raised from P8,000 to P25,000 each.

This would mean that an employee earning P455 per day or P10,010 per month would have an additional take-home pay of P472.59 per month if unmarried, P678.50 per month if head of the family, and P580.92 per month if married with four children.
Also, an employee earning P683 per day or P15,026 per month would have an additional take-home pay of P545.26 per month if unmarried; P1,307.18 per month as head of the family; and P1,190.52 per month for those married with four children.
However, reports also said that the government is set to lose P14 billion in tax collection with the signing into law of the said tax relief bill.

A television report from GMA’s Flash Report quoted Finance Secretary Margarito Teves as assuring that the government will look for other sources of income to recover this loss.
Teves cited a provision on RA 9504 which imposes an optional standard deduction for professionals, self-employed individuals, and small corporations. These deductions, he added, could generate as much as P15 billion for the government.
For his part, Federation of Philippine Industries president Jess Arranza was quoted by the same radio report as hailing the President for approving the tax exemption measure.
The Senate version of the measure was passed last May 27 while lawmakers at the House approved their version the following day.

The President signed the measure before starting a Cabinet meeting with Food and Energy officials to discuss plans on increasing food production and putting up more infrastructure programs.

Also, the President on Monday morning swore in former military chief Hermogenes Esperon Jr as the newly-appointed Presidential Adviser on the Peace Process; and outgoing Press Secretary Ignacio Bunye as the her new political adviser. - GMANews.TV

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