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THE Department of Finance has endorsed a legislative
bill seeking to exempt minimum wage earners from the payment of
annual income taxes.
In a position paper
submitted to the House of Representatives, Finance Undersecretary
Gil S. Beltran said the department supports the bill despite a
revenue loss of P950.72 million from the proposed tax exemption.
“The proposal would
legitimize and make fully effective the exemption of minimum wage
earners and their counterparts in government from the payment of
income tax,” Beltran said.
Under current revenue
regulations, minimum wage earners in private and government
institutions are required to file their income tax returns and pay
tax liabilities every March 15 for state workers, and before April
15 for private sector employees.
The tax exemption will benefit an
estimated 365,317 minimum wage earners.
“They are those that are within
the income tax net, representing about 13 percent of the total
number of minimum wage earners. In the government sector, about
83,850 workers will be benefited, and these belong to salary grades
one to four,” Beltran said.
In 2006, the government
signed into law that all minimum wage earners in both private and
public sectors belonging to salary grades one to three are exempted
from the withholding tax.
The exemption from
withholding tax of all minimum wage earners was implemented after
the government expanded the value-added tax to 12-percent from the
previous 10 percent.
The grant of tax exemptions had
been contentious since these would eat into scarce state revenues at
a time when the government is hard-pressed balancing its budget and
the main collecting agencies—the Bureaus of Internal Revenue and
of Customs— have failed to meet targets.
Customs accepts
revenue targets
In a document, the Customs 17
collection districts however have acceded to the targets set by the
finance department.
Major contributors this year are
the Port of Manila, which has the highest revenue target at 33
percent of the total or P84.4 billion, followed by the Manila
International Container Port with P64 billion, or 25.15 percent, and
the Port of Batangas with P58.9 billion or 22.37 percent of the
total.
The Ninoy Aquino
International Airport has to collect seven percent or P18 billion
this year.
The Office of Commissioner
expects to contribute P6.4 billion, or 2.5 percent of the total,
while the Port of Cebu is eyeing P5 billion. Subic targets P4.78
billion, Surigao another P2.9 billion, and San Fernando, P1.1
billion.
Districts with less than a
billion peso share this year are Clark, Zamboanga, Surigao, Tacloban,
Iloilo, and Legaspi.
In the first three months,
Customs should collect P51.75 billion to remain on track of its full
year program.
Last January, the bureau reported
that it met its target of P15.8 billion. For this month, it should
collect P16.52 billion.
Actual collections last
year amounted to P210.6 billion, or lower than the programmed P228
billion. The P17.4-billion shortfall was blamed on the appreciation
of the peso against the dollar.
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Chino S. Leyco
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