Villar sees early approval of tax relief bill in bicam meet

Senate President Manny Villar today said he foresees a speedy approval in the bicameral conference committee of the bill exempting minimum and middle-wage earners from income tax which was passed by the Senate on third reading Tuesday.

Villar, who is Nacionalista Party (NP) president, said the Senate version of the tax-relief bill was quite similar to the measure approved by the House of Representatives and predicted that the bill would not encounter major problems in the bicameral conference committee.

Unlike the heaper medicines bill which has remained pending in Malacañang, Villar said he was also confident that the bill would be promptly signed by President Arroyo into law as soon as both chambers ratify the reconciled version.

"I am confident that this bill will not encounter hitches in the bicameral conference committee so we could present it for the President's signature in the earliest possible time," Villar said, recalling that the bill was one to the two measures Congress leaders and Malacanang agreed to prioritize during the last Legislative-Executive Development Advisory Council (LEDAC) meeting.

"This bill will provide the much needed assistance to our workers," Villar said. "In the face of the hard times brought about by high prices of oil and food products, both workers and businesses should be given immediate reprieve via the granting of a temporary tax relief for minimum and middle-income wage earners."

"Hopefully, this measure would enable our workers to temporarily allocate more of their wages for basic goods while not necessarily affecting government revenue and business overhead," the Senate President said.

Villar said he was confident Sen. Francis "Chiz" Escudero, chairman of the Senate Ways and Means Committee, will see to it that the enactment of tax-relief bill will not face delays in the bicameral conference committee.

On Tuesday, the Senate unanimously approved on third reading the new income-tax reform bill that would grant automatic exemptions to minimum-wage earners and provide relief to all individual taxpayers by increasing personal exemptions to approximate increases in inflation.

Escudero said the approved Senate version differed only slightly with the House-approved measure, which provided for the so-called SNITS, or simplified net income-tax system, while the Senate version favored a 40-percent optional standard deduction, or OSD, for self-employed as well as professionals and corporate tax filers.

The Senate version also contained a separate provision exempting the employees' holiday, hazard and overtime pays, as well as nightshift differential pay from income-tax coverage, which items were included in the computations made under House Bill 3971.

Once enacted into law, married couples can enjoy P100,000 in combined income tax deductions (P50,000 each) plus an additional P25,000 deduction per dependent up to a maximum of four children, or total deductions of up to P200,000 for each family.

Escudero estimated that the government would gain at least P780 million from the proposed income tax system, explaining that the amount already deducted revenue losses due to the exemption of minimum wage earners and the adjustment of personal exemption to P50,000 per individual taxpayer and the P25,000 additional exemption per dependent up to a maximum of four children.

Revenue loss from the tax relief for minimum wage earners, pegged at P3.16 billion and the loss due to increase in exemption estimated at P11.09 billion can be offset by the revenues to be generated from the OSD valued at P15.03 billion.