By Romy Teruel
Columnist, Sunday Post
Income tax payers rejoiced when R.A. 9504 was signed by the President into law. The new Income Tax Law eased the burden of income tax payers with its provision for P50,000 personal exemption and P25,000 for each qualified child. More than that minimum wage earners are now exempt from paying income taxes.
Prior to this, personal exemption was P20,000 for single income tax payer, P25,000 for head of family, P32,000 for married, and P8,000 for each qualified child.
The measure was a great relief to the overburdened taxpayers already weighed down by high cost of living brought by the unrestrained increase in the price of oil and the food crises that hit the poor the most. "Here's a government that really cares," tax payers said of the measure. Those in government remember fondly that only a month ago President Arroyo authorized a 10% increase in their salary.
However, except for the minimum wage earners, the rejoicing has now stopped and is replaced by silent curse and gnashing of teeth. This column will try to provide the reasons for their curse and protest, albeit in silence. Even that salary increase has become meaningless as the amount is not even enough for the increase in income tax they have to pay under the new measure.
The Bureau of Internal Revenue has just come out with the new Tax Table to govern the implementation of the new income tax law. And for most of those who know how the BIR works, the amendment to the income tax law was just icing to cake to make it palatable. What BIR lost in the minimum wage earners, they recovered from those who will now be paying high income taxes because of the bracketing of taxable income.
For example, an income tax payer who is married with four qualified children and who has a taxable income of P298,457.52 will now pay an income tax of P42,589.48 where before he used to pay only about P36,000. That's because under the new income tax table he will have a personal exemption of P50,000 plus P100,000 for the four qualified children for a total of P150,000. But the balance of P148,457.04 will have an income tax of P10,416.67 plus 32% of the amount over P47,917.00 or P32,172.81 thereby having a total income tax payable of P42,589.48
Given the difficult economic times where will the tax payers get relief? Where is the relief there from the income tax burden envisioned by R.A. 9504? None from the law.
So they will look for income that is unregistered and unrecorded and therefore does not need payment of income tax. In layman's language, the new income tax law is another instrument that will promote graft and corruption. Who says that government is not a party to the promotion of graft and corruption?
I bet BIR never thought of this when they were considering the implementing rules of the new income tax law. What they must have in mind was how to recover what would be lost revenues from the exemption of minimum wage earners. Like the Memorandum of Agreement for the Ancestral Domain of the Bangsa Moro in Mindanao, the income tax table was kept under wraps until the bombs exploded.
NOTES. Tomorrow all government offices will join in the launching of the 108th Anniversary of the Civil Service. The theme of the celebration is "Republic Service – Kabalikat Ng Bayan sa Panahon ng Paghamon." It is a fitting theme to reassure the people that civil service is there side by side with them in facing the challenges of difficult times. But against the backdrop of the new income tax law, KABALIKAT there could be interpreted as NASA BALIKAT ( an added weight) NG BAYAN.
Anyway, HAPPY ANNIVERSSARY to all the civil servants. At the Capitol the month-long celebration will be launched with a convocation hosted by the Human Resource Management and Development Office. During the month-long celebration there will be bloodletting, blood sugar testing for employees, supplemental feeding, and even "bagsakan" of cheap agricultural food products. A family day for all provincial government officials and employees will be held on the last Friday of September.
Columnist, Sunday Post
Income tax payers rejoiced when R.A. 9504 was signed by the President into law. The new Income Tax Law eased the burden of income tax payers with its provision for P50,000 personal exemption and P25,000 for each qualified child. More than that minimum wage earners are now exempt from paying income taxes.
Prior to this, personal exemption was P20,000 for single income tax payer, P25,000 for head of family, P32,000 for married, and P8,000 for each qualified child.
The measure was a great relief to the overburdened taxpayers already weighed down by high cost of living brought by the unrestrained increase in the price of oil and the food crises that hit the poor the most. "Here's a government that really cares," tax payers said of the measure. Those in government remember fondly that only a month ago President Arroyo authorized a 10% increase in their salary.
However, except for the minimum wage earners, the rejoicing has now stopped and is replaced by silent curse and gnashing of teeth. This column will try to provide the reasons for their curse and protest, albeit in silence. Even that salary increase has become meaningless as the amount is not even enough for the increase in income tax they have to pay under the new measure.
The Bureau of Internal Revenue has just come out with the new Tax Table to govern the implementation of the new income tax law. And for most of those who know how the BIR works, the amendment to the income tax law was just icing to cake to make it palatable. What BIR lost in the minimum wage earners, they recovered from those who will now be paying high income taxes because of the bracketing of taxable income.
For example, an income tax payer who is married with four qualified children and who has a taxable income of P298,457.52 will now pay an income tax of P42,589.48 where before he used to pay only about P36,000. That's because under the new income tax table he will have a personal exemption of P50,000 plus P100,000 for the four qualified children for a total of P150,000. But the balance of P148,457.04 will have an income tax of P10,416.67 plus 32% of the amount over P47,917.00 or P32,172.81 thereby having a total income tax payable of P42,589.48
Given the difficult economic times where will the tax payers get relief? Where is the relief there from the income tax burden envisioned by R.A. 9504? None from the law.
So they will look for income that is unregistered and unrecorded and therefore does not need payment of income tax. In layman's language, the new income tax law is another instrument that will promote graft and corruption. Who says that government is not a party to the promotion of graft and corruption?
I bet BIR never thought of this when they were considering the implementing rules of the new income tax law. What they must have in mind was how to recover what would be lost revenues from the exemption of minimum wage earners. Like the Memorandum of Agreement for the Ancestral Domain of the Bangsa Moro in Mindanao, the income tax table was kept under wraps until the bombs exploded.
NOTES. Tomorrow all government offices will join in the launching of the 108th Anniversary of the Civil Service. The theme of the celebration is "Republic Service – Kabalikat Ng Bayan sa Panahon ng Paghamon." It is a fitting theme to reassure the people that civil service is there side by side with them in facing the challenges of difficult times. But against the backdrop of the new income tax law, KABALIKAT there could be interpreted as NASA BALIKAT ( an added weight) NG BAYAN.
Anyway, HAPPY ANNIVERSSARY to all the civil servants. At the Capitol the month-long celebration will be launched with a convocation hosted by the Human Resource Management and Development Office. During the month-long celebration there will be bloodletting, blood sugar testing for employees, supplemental feeding, and even "bagsakan" of cheap agricultural food products. A family day for all provincial government officials and employees will be held on the last Friday of September.
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