Bill to exempt marginalized sector from paying income tax

CEBU, Philippines - Senator Paolo Benigno “Bam” Aquino IV has filed a bill that will exempt the marginalized sector from paying the income tax.

Aquino, who was in Cebu recently, said his bill aims to counter the move of the Bureau of Internal Revenue to tax the marginalized income earners.

Senate Bill 2227, or an act exempting MIEs from income tax, value-added tax, and percentage tax was sponsored by Aquino, the chair of the Senate committee chairman on trade, commerce, and entrepreneurship.

Aquino said that minimum wage earners are currently exempted from paying income tax but the MIEs are not.

“So bakit hindi patas ang BIR? Yung kinikita ng mga minimum wage earners ay mas malaki pa sa mga sari-sari owners, yung mga tricycle drivers pero exempted sila from paying income tax. Tapos ngayon gusto ng BIR na e-taxed yung mga MIEs. I filed this bill para naman, maging patas lang,” said Aquino, who was the keynote speaker during the Open Collaboration of East Asia New Champions held here.

Aquino explained that in a country where 2.96 million Filipinos are unemployed, the poor turn to various forms of self-employment to be able to make ends meet.

“The farmers and fisherfolk in the rural areas, and the tricycle drivers, vendors and small sari-sari store owners in the cities think of innovative ways everyday just to earn decent income for their families,” Aquino said.

Aquino’s bill stated that MIEs refer to a worker neither in the private sector nor an employee in the public sector who earns as much income as minimum wage earners.

MIEs, the bill said, are self-employed individuals with gross sales/receipts not exceeding P150,000 during a 12-month period.

The activities of such MIEs are considered principally for subsistence or livelihood, the bill stated.

The bill added that charging taxes does not help these micro-entrepreneurs or MIEs as it only becomes a burden to a sector that is situated below the poverty line.

Aquino said his bill is still pending at the committee on the Proper Implementation of the National Internal Revenue Code, which Senator Sonny Angara chairs. It will be heard at the committee level next month.

Under BIR Memorandum Circular No. 7-2014, MIEs are required to pay income tax but are exempted from paying value-added tax and business tax.  (FREEMAN)