Enactment of tax relief bill is needed – council

The Cebu City Council has called for the immediate enactment of the tax relief bill, which the Senate and the House of Representatives had passed last month.

In a resolution, penned by Councilor Arsenio Pacaña, chairman of the council’s committee on trade, commerce, cooperatives and entrepreneurship, the council said that the legislation will benefit a lot of Cebuanos, as it would on many low- and middle-income earning Filipinos.

The legislation aims to grant tax exemption to workers with annual income of P200,000 and below. The bill also proposed a simplified net income taxation for self-employed and professionals.

The bill amends the Tax Code by increasing the personal tax exemption to P50,000 (for all workers either single, married or a breadwinner) from its current table of exemption, which is P20,000 for single workers, P25,000 for a family head, and P32,000 for married individuals.

The tax relief bill is necessary because the government’s reduction of tariffs on some basic food products has not been felt by many in the low- and middle-income brackets due to the unabated and continuing increases in the prices of oil and other petroleum products, said the council.

“It is an undeniable reality that those who belong to the low and middle income brackets are having a hard time sending their children to school due to soaring prices of basic commodities … there is a strong public appeal for government to give workers an immediate reprieve by granting a temporary tax relief for minimum and middle-income earners,” the council said.

The council said that a genuine tax relief law would allow Filipinos, belonging to the low- and middle-income brackets, an immediate reprieve and let them allocate more of their wages for basic goods.

The People’s Management Association of the Philippines had already said that the legislative initiative would provide effective relief to workers considering that many businesses could not provide them salary increases.

The PMAP earlier said the bill would automatically give workers an equivalent of a P40 daily salary increase or a P1,000 monthly pay hike, besides giving the half a million minimum wage earners the much-needed tax break in the face of increasing cost of basic commodities.

For government to cope with revenue loses from the tax exemption, the PMAP said the government must conduct a more efficient tax collection performance and a more prudent use of public funds.

Last month, the Senate approved its own version of a tax relief bill for workers but differences with the version of the House of Representatives could lead to protracted debates before coming up with its final bill that would be signed into law.

Senate Bill 2293 did away with the Simplified Net Income Taxation Scheme, which was approved by and became the version of the House. But legislators rejected a proposal by Sen. Miriam Defensor-Santiago that tax exemptions be hiked to P75,000 from the P50,000 that was approved earlier.

In lieu of the SNITS, the Senate went for the Optional Standard Deduction dropping limits on allowable deductions for professionals that, finance officials said, was key to limiting revenue loses. Senators also increased the OSD coverage to include corporations. Both chambers agreed on a 40 percent rate, up from 10 percent.    — Joeberth M. Ocao/RAE