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By Efren L. Danao, Senior Reporter
For opposition Senator Francis “Chiz”
Escudero, his visit to Malacañang Tuesday was only his second since
2004 and for good reason —President Gloria Arroyo was signing into
law his bill exempting minimum-wage earners from paying income tax
and increasing personal and additional exemptions to all taxpayers.
“When it comes to lawmaking, politics should
be set aside and the common weal should prevail,” he said of his
rare visit to Malacañang. (See related story A3.)
The passage of the law itself is indicative of
the desire of all political parties to ease the burden of the
minimum-wage earners suffering from high fuel and food prices. Under
the Constitution, all revenue measures should start from the House.
But Escudero held preliminary hearings on the
tax-relief measure so that when the House transmitted its approved
bill to the Senate, he held only one committee hearing, and then
reported it out within a week.
The Senate passed Escudero’s bill on third and
final reading only on May 20. The legislative mill was hastened when
House Speaker Prospero Nograles ordered Escudero’s counterpart in
the House, Antique Rep. Exequiel Javier, and House Majority Leader
Arthur Defensor of Iloilo to adopt the Senate version. This obviated
the need for the convening of a bicameral conference committee whose
meetings are usually punctuated by long drawn-out negotiations and
the desire to protect key provisions approved by each chamber.
Escudero said the Department of Finance endorsed
his amendments to the House bill, because it has a net revenue
impact of at least P780 million.
The revenue loss from the exemption of
minimum-wage earners and the exclusion of their overtime pay, night
differential, holiday pay and hazard pay from income tax was
estimated at P3.16 billion. The national coffers also stand to lose
P11.09 billion from the increase in personal and additional
exemptions for all taxpayers, for a grand total of P14.25 billion in
foregone revenue.
“But the loss will be compensated by the
P15.03 billion to be earned with the 40-percent Optional Standard
Deduction not only for the self-employed and professionals but also
for corporations,” Escudero said.
This provision for deduction will benefit small
firms and professionals who could not get the services of an
accountant, as they will no longer be subject to audit.
Sen. Manuel “Mar” Roxas 2nd also lauded the
law for providing relief to workers in this regime of continued
price increases of basic goods. He said the tax exemptions will
provide minimum-wage earners an additional take-home pay of P750.
“A worker in Metro Manila earning P7,900 a
month will now have an additional P750 of take-home pay, per month,
or P34 per day. He can now spend this additional money for his needs
or for his family’s needs, such as food, medicine and the tuition
of his children, among other uses,” he said.
He added that with the increase in personal
exemptions, a salaried employee earning P10,010 a month would have
an additional take-home pay of P5,671.02 a year if unmarried;
P8,142.04 a year as head of the family; or P6,971.02 a year if
married with four children.
He added that an employee earning P15,026 a
month would have an additional take-home pay of P6,543.10 a year if
unmarried; P15,686.20 a year as head of the family; and P14,286.20 a
year if married with four children.
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