Solon says wage earners now a step closer to tax exemption
CEBU, Philippines - A bill seeking to exempt minimum wage earners from paying income tax is one step closer to being enacted into law, a party-list representative said on Thursday.
A GMA news report online said AAMBIS-OWA Representative Sharon S. Garin said the House ways and means committee's technical working group is now finishing the final draft of the consolidated version of the bill after 11 public hearings.
Garin expects the committee to approve the bill despite the opposition from both the Department of Finance and the Bureau of Internal Revenue.
During the committee hearings on the measure, financial experts said the government could lose at least P30 billion in the first year of implementation after the bill is signed into law. Still, they expect a higher compliance rate from individuals and corporations to offset such loss.
"The draft bill indicates that there would have four tax brackets. In the first bracket, workers earning less than P180,000 a year would be exempted from paying income taxes. In the second bracket, workers who earn P180,000 to P500,000 annually would pay a tax rate of 9 percent.
"Meantime, those who earn between P500,001 to P10 million a year would have a tax rate of 17 percent while those with more than P10 million of earnings would pay a 30 percent income tax, in the third and fourth brackets respectively," according to the lawmaker.
Lawmakers are also considering reducing corporate tax to 25 percent as an incentive to businesses.
Garin said that the bill is meant to increase the take-home pay of employees to increase their purchasing power that in turn translates to economic growth.
“If the government can’t push for higher wages, the next sensible thing to do is to decrease the taxes imposed against our workers,” she said.
“Those who earn less should be met with lower taxes. The taxes paid by the millionaires and the middle-class cannot be the same. That is what social justice demands,” she added. (FREEMAN)
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