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By Angelo S. Samonte, Reporter
President Gloria Arroyo will sign into law
Tuesday the measure that will exempt minimum wage earners from
paying income taxes, and increase the personal exemptions for
employees.
The tax exemptions would translate into an
additional take-home pay of P750 a month for minimum wage earners,
according to Sen. Mar Roxas, the principal author of the measure.
“This new law will provide relief and
additional money to spend for our workers, which is needed more than
ever at this time of continued increases in prices of necessary
goods,” he said.
The new law also mandates that all holiday,
night differential, hazard and overtime pay will also be tax exempt.
With its passage, an employee earning P455 per
day or P10,010 per month would have an additional take-home pay of
P472.59 per month if not married; P678.50 per month if head of the
family; and P580.92 per month if married with four children.
Also, an employee earning P683 per day or
P15,026 per month would have an additional take-home pay of P545.26
per month if not married; P1,307.18 per month as head of the family;
and P1,190.52 per month for those married with four children.
“We have fought for this for a long time. Many
Labor Days have come and gone wherein we fought for this for our
workers, and at last, [the] income tax exemption of minimum wage
earners is now a law,” he added.
No more bicameral hearings
The new law on tax exemptions was certified
urgent by Malacañang and the House adopted late last month the
Senate version of the bill, assuring its faster passage and no need
to hold bicameral hearings.
Aside from exempting minimum wage earners from
paying income taxes, the measure increases personal exemptions to
P50,000 and additional exemptions to P25,000 per dependent, up to
four dependents.
The House also accepted the Senate decision to
do away with the Simplified Net Income Taxation System or SNITS that
was carried by the House version, and substituting it with the
40-percent optional standard deduction or OSD, not only for the
self-employed and professionals but also for corporations.
Sen. Francis Escudero, chairman of the Senate
Committee on Ways and Means, said that while the income tax filing
period is still in April, the minimum wage earners would immediately
feel its impact as their earnings would no longer be subjected to
withholding tax.
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