Gov't workers reject draft IRR on tax relief

MANILA, Philippines – Government workers yesterday rejected the proposed implementing rules and regulations (IRR) for the law exempting minimum wage earners from paying taxes.

The 80,000-strong Public Services Labor Independent Confederation (PSLINK) said the current draft of the IRR is laden with restrictive provisions that effectively prohibit many minimum wage earners from availing themselves of the income tax exemption.

“This creates its own qualifications of who should be covered by the tax exemption package, consequently redefining who a minimum wage earner is,” PSLINk secretary-general Annie Enriquez-Geron said.

Geron said the draft regulation states that workers whose basic pay is equal to the minimum wage but receive additional compensation such as commissions or honoraria, benefits in excess of the statutory tax-exempt amount of P30,000, taxable allowances and other taxable incomes other than the basic pay, holiday pay, overtime pay, hazard pay and night-shift differential pay, and other income not subject to final tax, shall not be considered as minimum wage earners.

Geron said the law clearly defines minimum wage earners as those who are receiving compensation not more than the statutory wage fixed by the Regional Tripartite Wage and Productivity Board.

Last June, President Arroyo signed into law Republic Act 9504, which exempts minimum wage earners in both the private and public sectors from payment of income tax and increases personal and additional exemptions allowable to individuals.

But PSLINK said the IRR of the newly signed law is “flawed and unlawful.”

“The proposed regulations violate a previous Supreme Court decision which ruled that increased tax exemptions should cover compensation income earned for the entire year,” Geron said.

In addition, the group criticized the draft regulations for being unnecessarily stringent with its various administrative requirements and procedures.

“Instead of providing relief, the draft regulations impose undue burden on employees and employers alike. This is particularly true for the public sector which is already reeling from loads of administrative work,” Geron said.

“The tax relief package law is already too little, too late. Workers are already overwhelmed by the high prices of food and fuel. We shouldn’t be made to wait any longer for the proper implementation of the tax exemptions,” she added. – Mayen Jaymalin