Income Tax Exemption Law Signed
The new legislation also granted tax relief to workers from both public and private sectors by increasing the personal exemptions of individual taxpayers.
The President signed the tax break measure amending Republic Act 9504 or the National Internal Revenue Code of 1997 in Malacanang. It seeks to bring financial assistance to Filipino families saddled by the high oil and food prices as well as help reduce the wide tax gap in the taxation of self-employed and professionals.
Senators Manuel Roxas II, Francis Escudero, Juan Ponce Enrile, and Ramon Revilla Jr. and House Speaker Prospero Nograles, Antique Rep. Exequiel Javier, and Albay Rep. Edcel Lagman were among those present during the signing ceremony.
"Sumusulong na ang ating daglian at pansamantalang tulong sa mga pamilyang Pilipino na nagigipit ng pandaigdigang presyo ng langis at bigas. Kanina pinirmahan natin ang batas na hindi na kailangang magbayad ng income tax ang mga sumasahod lamang ng minimum wage," the President said at the opening of the Cabinet meeting, shortly after the signing.
Under the new law, the tax exemptions will provide additional take-home pay of P34 a day or P750 a month for minimum wage earners, according to Senator Escudero.
Holiday pay, overtime pay, night shift differential pay and hazard pay will also be tax exempt for minimum wage earners, both from the private and government sectors.
Escudero said the economic stimulus package could augment the income of the people amid the soaring prices of oil, food and other consumer products.
"Nagpapakita ito na may mga bagay na di dapat pinag-aawayan. Isa itong bagay na dapat pagkaisahan. Isang bagay na makakatulong sa ating bayan, na walang pinipiling kulay, partido o kinikilingan," he said of the passage of the tax break.
Aside from exempting minimum wage earners from paying income taxes, the measure raised the personal tax exemption to P50,000 per individual taxpayer and additional exemptions to P25,000 per dependent, up to four dependents.
Before, the tax code only allows a P20,000 exemption for single individual, a R25,000 exemption for a head of family and a P32,000 exemption for each married individual.
In effect, a family of six with both spouses working will get tax exemption if their annual income is P200,000 or less
Finance Secretary Margarito Teves said the government has projected revenue loss of P14.25 billion from the tax exemption of minimum wage earners and other tax adjustments contained in the bill. …