Republic Act 9504 which amends the National Internal Revenue Code of 1987 was signed into law by the President, Gloria Macapagal-Arroyo, yesterday in Malacanang.
This law grants exemption for minimum wage earners from having to pay income tax. It also increased the personal exemptions of employees. It also exempts minimum wage earners from being taxed in their holiday, night differential, hazard and overtime pay.
The new personal tax exemptions for employed individuals are:
- Single: P20,000 - P50,000
- Head of family: P25,000 - P50,000
- Married: P32,000 - P50,000
- For each qualified dependent not exceeding 4: P8,000 - P25,000.
This allows a family of six, with both parents working and four dependent children to enjoy a total tax exemption of P200,000.
Witnessing the signing were Senators Ramon Revilla, Jr., Juan Ponce Enrile, Francis Escudero, Richard Gordon, Manuel Roxas lll, House Speaker Prospero Nograles, Rep. Exequiel Javier and Martin Romualdez.
With these tax exemptions in place the Philippines will lose about P3.16 billion in annual in tax revenues. While the new personal exemption levels would cost about P11.09 billion in revenue losses.
The government however will be able to recover the tax revenue losses with the imposition of optional standard deductions (OSD) in filing business income tax returns which could amount to P15.03. The OSD will simplify the filing of income tax returns and benefits for professionals and SME’s.
[source]
1 response so far ↓
1 Feliciano R. Javier // Aug 14, 2008 at 9:52 am
I’m working at Pricon Microelectronics Inc. at 108Competence Drive CIP1 Sepz Canlubang, Calamba, Laguna
It’s a very good news, but sad to say why this law not effective in our company yet? And another one, our tax there is very big, unbelievable…?
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