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THE
Bureau of Internal Revenue will hold a public hearing
today on the exemption of minimum-wage earners from the
withholding tax, a policy that was signed into law early
this month.
The
hearing is a required procedure since the new law
revised portions of the implementing rules of the
National Internal Revenue Code, mainly on the provisions
on those who qualify for exemption from withholding of
income tax on compensation.
According to the draft order, those exempted are
individuals whose take- home pay does not exceed the
statutory minimum wage of P10,000 per month or P120,000
a year.
The
exemptions will also include holiday, overtime,
night-shift differential and hazard payments received by
the employee—private or government employed.
The
statutory minimum wage refers to the rate fixed by the
Regional Tripartite Wage and Productivity Boards and
defined by the Bureau of Labor and Employment Statistics
of the Department of Labor and Employment.
The
Regional Tripartite Wage and Productivity Boards, on the
other hand, determine the wage rates in the different
regions based on established criteria as the basis of
exemption from income tax.
Minimum-wage earners may be exempted from tax, but they
are still expected by the government to submit their
income-tax return, the bureau said.
On
June 17, President Arroyo signed into law Republic Act
9504, which amends the National Internal Revenue Code of
1997.
Exempted were more than half a million minimum-wage
earners.
The
new law also increased the level of personal exemption
and deductions of individual taxpayers.
The
measure would cost the government P14.25 billion in
forgone revenues, but imposes optional standard
deductions—estimated to generate P15.03 billion—to make
it revenue-neutral.
The
new law increases the personal exemption of unmarried
taxpayers from P20,000 to P50,000; P25,000 to P50,000
for a head of the family; and P32,000 to P50,000 for
married individuals.
The
deduction for each qualified dependent, not exceeding
four, has been raised from P8,000 to P25,000. |
