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THE
House of Representatives approved on third and final
reading on Monday night a tax measure that frees from
any tax obligation all wage earners grossing P150,000
and below annually.
Voting
192-3, legislators passed House Bill 3971, a substitute
measure consolidating 20 separate but related measures
proposing to amend certain provisions of Republic Act
8424 or the National Internal Revenue Code of 1997.
The bill
raises to a uniform P50,000 the personal exemption of
single individuals or married but legally separated with
no qualified dependents, head of family, and each
married individual who now enjoy exemptions of P20,000,
P25,000 and P32,000, respectively. Exemptions for
dependents not exceeding four would be increased to
P25,000 each from the current amount of P8,000.
During
deliberations, several individual amendments to the bill
were rejected except for the one proposed by Lakas Rep.
Edcel Lagman of Albay, which provides that a fourth
child born after December 31, 2010 and third child born
after December 31, 2012 shall not be claimed as
dependents.
“The
proposed amendments to the tax code should provide
financial relief to taxpayers during these difficult
times brought about by a confluence of domestic and
international factors resulting from the global food
production slowdown, the spiraling crude oil prices and
the heightening inflationary pressure on various
commodities, especially food and transport services,”
said Speaker Prospero Nograles.
Legislators agreed to raise personal tax exemptions from
P96,000 to P150,000; and those earning within the new
tax exemptions would be exempted from the 10-percent
withholding tax deductions on their monthly paychecks.
Besides
the measure, the House ways and means committee is
finalizing the Simplified Net Income Taxation (Snits) in
HB 1809 authored by Deputy Speaker Eric Singson,
simplifying the system of taxation for the
self-employed.
Singson’s explanatory note said that “after six years
(since 1998) of implementing the 1997 Tax Reform Law (RA
8424), income collections from the self-employed grew by
only 6.77 percent versus 19.86 percent prior to the
effectivity of the Comprehensive Tax Reform Package.”
He
deduced “that the so-called hard-to-tax groups do not
report items of income, do not issue receipts,
over-charge their allowable deductions, or do not file
income tax at all.”
Singson
added that only 2.6 percent of income taxes come from
the hard-to-tax groups while fixed income or
compensation earners account for 97.4 percent of total
individual taxes collected by government.
The
Alliance of Progressive Labor (APL) accused Lakas Rep.
Exequiel Javier of Antique, committee chairman, of
misrepresenting the agreement for P150,000 personal
exemption for all taxpayers, arrived at during the
public hearing held by his committee on April 22.
“But
contrary to what was discussed, the committee report
later provided instead for a P150,000 exemption per
family and not per individual taxpayer,” said Edwin
Bustillos, APL deputy secretary general. |
