The government has taken a proactive stance in adopting social-welfare programs for the hoi polloi nowadays. Recently, the cheaper-medicine bill, which aims to lower the price of medicine in the country, was signed into law (Republic Act 9502), while the previously approved P20 increase in the minimum wage in the National Capital Region shall also take effect later this month.

A plan to extend financial assistance to Manila Electric Co. (Meralco) consumers with a predetermined monthly consumption has similarly been initiated.

With all these programs falling like manna from heaven, the information that amendments to the National Internal Revenue Code (Republic Act 8424) primarily aimed at alleviating the taxpayer’s burden are now within grasp and is definitely a welcome addition thereto.

In an unparalleled show of compassion, our honorable legislators from both houses of Congress recently introduced the tax-relief bill, and with the adoption by the House of Representatives of the Senate version, it already became an “enrolled bill.” Hence, we are now merely waiting for the President to either affix her signature therein or let it lapse into becoming a law.

Under the tax-relief bill “minimum wage earners,” referred to “as workers in the private sector paid the statutory minimum wage, or to employees in the public sector with compensation income of not more than the statutory minimum wage in the nonagricultural sector where they were assigned,” are now exempt from the payment of income tax, which shall include the holiday pay, overtime pay, night-shift differential pay and hazard pay given to the minimum-wage earners.

Notably, the tax-relief bill uses the statutory minimum wage in the nonagricultural sector as basis for the income-tax exemption of government employees, instead of an earlier proposal limiting the tax-exemption privilege to government employees who occupy positions with Salary Grade 5 and below. The salary grade determines the base pay of government employees, and due to existing variance between the statutory minimum wage as set by the Regional Tripartite Wage Boards, which varies per region, and base pay of government employees with Salary Grade 5 and below, our legislators deemed it necessary to adopt the statutory minimum wage in the nonagricultural sector as basis of the tax exemption of government employees.

Another revolutionary scheme initiated by Congress in the tax-relief bill is the application of uniform amount of basic personal-exemption allowance. The tax-relief bill does away with the current differentiation in the amount of personal-exemption allowance on the basis of the tax status of the individual taxpayer (i.e., single, legally separated, head of the family and married taxpayers) which means that each individual taxpayer shall be entitled to a uniform P50,000 personal-exemption allowance. Aside from this, heads of family and married taxpayers with qualified dependent shall also be entitled to higher additional exemption allowance from P8,000 to P25, 000 for each qualified dependent not exceeding four.

Thus, for example, a married individual taxpayer receiving a salary more than the minimum wage with four dependents shall be entitled to P150,000 as deduction from his/her taxable income, which is more than double the P64,000 he/she is currently entitled to under the Tax Code.

The Optional Standard Deduction (OSD) that an individual taxpayer engaged in business and/or practice of profession may claim in lieu of the itemized deductions was likewise increased from 10 percent of gross income to 40 percent of gross sales/receipts. The legislative branch equally treaded new grounds by giving corporations the prerogative to avail themselves of the OSD computed at 40 percent of their gross income.

Apparently, the tax-relief bill, with its munificence to taxpayers, qualifies more as social legislation rather than a tax measure since it mainly promotes social justice, which, in the words of Justice Laurel, “is the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated.” (Calalang v. Williams, G.R. 47800, December 2, 1940) 

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 olivegil.m.beltran@bdblaw.com.ph or call 8562952.

THE Energy Regulatory Commission (ERC) recently ordered the Manila Electric Co. (Meralco), the country’s biggest distribution utility, to refund customers P2.7 billion in meter deposits which they have been paying since the 1980s when applying for electric service.

Watching the trading on the Philippine Stock Exchange (PSE) these last two days was wonderful. But only if you are the kind of person who slows down at every traffic accident to check if there are any fatalities.

Like some of our citizens, I felt that moving the Independence Day holiday a few days earlier to give everyone a long weekend diminished somewhat the purpose of declaring June 12 a holiday. As one editorial pointed out, a pause from the daily grind once a year helps remind us of the significance of the occasion we commemorate.

Alálaong bagá: Called to be special

A people borne on eagles’ wings

The trek through the wilderness brought Israel to the foot of Mount Sinai. Moses’s mission started here in the wilderness surrounding Mount Sinai (3:1), and he had received earlier the promise from God that here he would worship the Lord after liberating the people from Egypt (3:12). Pitching their tent there, Moses went up the mountain to commune with God.

About Town: Extend CARP, but . . .

The Comprehensive Agrarian Reform Program (CARP) was started in 1988 under the Cory Aquino administration. It seeks to achieve social justice and propel countryside development through two core programs: land acquisition and distribution, under which the Department of Agrarian Reform (DAR) gives land to landless farmers, and program beneficiaries development, where farmers are provided the necessary support services.

Tax Law for Business: Taxation as incorporated in social legislation

The government has taken a proactive stance in adopting social-welfare programs for the hoi polloi nowadays. Recently, the cheaper-medicine bill, which aims to lower the price of medicine in the country, was signed into law (Republic Act 9502), while the previously approved P20 increase in the minimum wage in the National Capital Region shall also take effect later this month.

Reflections from the Mirror: A smiling Senate

Today is Philippine Independence Day. Long Live the Philippines!

After a prolonged wait of almost four years, the Commission on Appointments (CA) finally gave me a passing grade on June 4, to which I suspect that the Holy Spirit had come to bless me that memorable day. I was very thankful for the surprisingly lighthearted endorsements that opposition senators offered me in an unsolicited gesture of goodwill and statesmanship.