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THERE is
a pool of uncollected taxes from minimum-wage earners
totaling some P500 million that the Bureau of Internal
Revenue (BIR) is not interested in collecting for the
moment.
The
money represents taxable income that should have been
withheld and set aside for the BIR by employers around
the country but was eventually dropped as Malacañang
issued an executive order stopping the practice of
withholding a portion of an employee’s monthly income
for tax purposes.
Deputy
BIR Commissioner Nelson Aspe estimated the uncollected
revenue at P200 million a year for two-and-a-half years,
or from 2006 to June this year.
This
surfaced at the public hearing conducted by the BIR on
Tuesday to help it craft the implementing guidelines to
the newly minted law exempting minimum-wage earners from
income tax.
According to Aspe, the BIR would rather focus on
extracting from the large taxpayers, where back taxes
are potentially higher.
“We
estimated the uncollected tax withheld at around P200
million a year,” Aspe said, without much interest.
The
presidential order stopped employers from withholding a
portion of their employees’ earnings but did not exempt
anyone from paying the tax, Aspe stressed.
While
the income tax remains a responsibility of employees,
millions have chosen not to pay it, he said.
These
tax liabilities extended from January 2006, when
President Arroyo signed the executive fiat, up to June
this year.
Republic
Act 9504, which now exempts minimum-wage earners from
income tax, begins on July 5 following its publication
as required by law.
Aspe
vowed to iron out practical problems in the implementing
guidelines that surfaced on Tuesday at the public
hearing concerning so-called equity issues, for
instance.
He was
told that while a Metro Manila-based worker earning P382
a day was tax-exempt under the law, the same worker in
Region 4 earning P350 a day is not exempted because the
minimum wage in the area is only P320 a day.
Aspe
vowed to discuss the matter with the Department of Labor
and Employment but must, in the meantime, implement the
law as mandated.
The new
law was previously seen to generate up to P14.25 billion
in forgone revenues, but because the money effectively
given back to wage earners was also seen to push
consumption activities higher, collection from the
value-added tax was, likewise, expected to increase and
compensate for the initial revenue loss.
“That is
why the new law is revenue-neutral,” Aspe said. |
