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By Efren L. Danao, Senior Reporter
The House adopted Wednesday the Senate version
of the bill granting tax exemption to minimum wage earners and
increasing personal and additional exemptions of individuals,
assuring the faster passage of the Malacañang-certified measure.
“With the adoption, there is no more need to
convene a bicameral conference committee,” said Sen. Francis
Escudero, chairman of the Senate Committee on Ways and Means and
author of the Senate version.
The bicameral body meets only to reconcile the
differing provisions of the House and Senate versions of a bill.
With the House adopting the Senate bill as its own in plenary
session, the certified bill would no longer undergo the usual long
drawn-out negotiations between the House and the Senate that usually
attended the reconciliation of the differing provisions.
Little differences in major items
The Senate version hewed closely to the House
version, exempting minimum wage earners from paying income tax and
increasing personal exemptions to P50,000 and additional exemptions
to P25,000 per dependent, up to four dependents.
The exemption of overtime pay, night
differential, holiday pay and hazard pay of minimum wage earners
from income tax was contained only in the Senate version and this
was accepted by the House.
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 (OSD) not only for the
self-employed and professionals but also for corporations.
The Department of Finance has estimated a
revenue loss of P14.25 billion from the tax exemption of minimum
wage earners, the higher personal and additional exemption, and the
exclusion of overtime pay, night differential, holiday pay and
hazard pay from tax. A gain of P15.03 billion was estimated with the
adoption of the 40-percent optional standard deduction for a net
gain of P780 million.
Escudero said the OSD appeals to small firms
with no accountants as there will be no more audit of their tax
returns.
With plenary action over, the House, the first
chamber to pass the bill, will now print the enrolled bill, then
transmit it to the Senate before the bill goes to Malacañang for
President Gloria Arroyo’s signature.
Escudero 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 once the President signs the enrolled bill.
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