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In
celebrating Labor Day today, we honor the Filipino
workers who play indispensable roles in the development
of our country. Such roles are very much emphasized in
our Constitution, which states that labor is “a primary
social economic force” and, therefore, “the State shall
protect the rights of workers and promote their
welfare.” (Article II, Section 18)
It is
unfortunate, however, that despite the importance
accorded to labor by our Constitution and labor laws,
Filipino workers still suffer because of the unstable
economic conditions of our country. With the recent
increase in the prices of our basic staples,
sky-rocketing cost of fuel products and soaring prices
of commodities, our workers barely derive any benefit
from their wages.
The
suffering of our workers is further aggravated by the
fact that taxes are deducted from their already meager
wages while the amount of basic personal and additional
exemptions have yet to be upgraded since their last
adjustment in 1998. Because of this, it can be argued
that our current income-tax law no longer complies with
the constitutional provision that “the rule of taxation
shall be uniform and equitable” and that “Congress shall
evolve a progressive system of taxation.” (Article VI,
Section 28[1]) That provision is founded on theoretical
justice, a basic principle in taxation which means that
a good tax system must be based on the taxpayer’s
ability to pay.
To ease
the burden and suffering of our workers due to the
worsening economic conditions, and to remedy the unjust
and inequitable application of our income-tax laws to
the working class, our lawmakers have recently drafted a
bill that seeks to amend certain provisions of the Tax
Code on individual income taxation.
House
Committee Report 451 on the bill is already on second
reading in the House of Representatives. The measure
proposes a uniform basic personal exemption of P50,000,
regardless of the civil status of the taxpayer. In
addition, the amount of additional exemption for each
dependent will be increased from the current P8,000 to
P25,000.
Another
highlight of the measure is the increase in the amount
of the Optional Standard Deduction, which is available
to self-employed individuals or individuals engaged in
the practice of their profession, from 10 percent to 40
percent of gross revenues.
And this
is not all.
Another
reason that should cause our workers to celebrate this
Labor Day is the issuance by the Bureau of Internal
Revenue (BIR) of Revenue Regulation (RR) 5-2008 which
increases the threshold amount for de minimis rice and
clothing/ uniform allowances. Previously, rice
subsidies amounting to P1,000 or one sack of 50-kg rice
per month amounting to P1,000 and uniform and clothing
allowances not exceeding P3,000 per annum, furnished by
the employer to his employees, whether managerial or
rank-and-file, were considered as de minimis benefits.
As such, these benefits were exempt from income tax as
well as fringe-benefit tax. Now, under RR 5-2008, the
amounts of rice subsidies and uniform and clothing
allowances to be considered de minimis benefits will be
increased to P1,500 and P4,000 per annum, respectively.
Indeed,
the bill, if enacted into law, would be a great relief
to our workers who are now burdened with the soaring
prices of basic commodities. The issuance of RR 5-2008
is also very timely as an added tax relief to taxpayers
that will help them tide over current economic
difficulties.
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The author is an associate of BDB Law. If you have any
comments or questions concerning the article, you can
e-mail the author at roy.n.relato@bdblaw.com.ph or call
8562952. |
