Press Release
September 25, 2008

ROXAS CITES STRONG REASONS FOR FULL IMPLEMENTATION OF TAX EXEMPTION FOR MINIMUM WAGE EARNERS SUPREME COURT, BIR REGULATIONS PROVIDE PRECEDENT

Liberal President Senator Mar Roxas said there were strong justifications for providing a full-year implementation of Republic Act No. 9504, which exempts minimum wage earners from income taxes and increases personal exemptions for other workers.

"Both the Supreme Court and the BIR itself have provided the precedent and the means by which a full-year implementation is possible. It must also be remembered that it was Congress' intention to exempt minimum wage earners for the full year," said Roxas, primary author of the new tax exemption law, whose implementing rules and regulations were approved by the Finance department earlier this week.

Roxas, who plans to take his complaint to the Court of Tax Appeals, said the Supreme Court had already ruled that a tax exemption could be applied retroactively, even prior to the effectivity of the law. In Umali vs. Estanislao, promulgated May 29, 1992, the Supreme Court ruled that RA 7167, increasing personal and additional tax exemptions of individual taxpayers, was applicable to income earned for the entire 1991, even though this law took effect on January 30, 1992.

"Itong dating tax exemption law ay naging epektibo noong 1992 lamang, pero sakop niya ang buong 1991. Kaya wala akong nakikitang dahilan kung bakit itong bagong minimum wage tax exemption law, na naging epektibo nitong Hulyo, ay hindi maa-apply sa buong taong 2008," he said.

"Malinaw na malinaw na sa pagsulat at pag-debate nitong batas, ang intensyon ng mga mambabatas ay mapapakinabangan itong tax relief para sa buong taong 2008," he added.

He also cited the BIR's Revenue Regulations 01-2006, which already put a stop to the collection of withholding taxes from minimum wage earners since January 2006. Such an exemption, Roxas said, should cover 2006 up to the point when RA 9504 was put into effect, on July 6, 2008.

"Noon pa palang hindi kinokolekta ang withholding tax ng mga minimum wage earners. Bakit ngayo'y naisabatas na ito ay gagawing kalahating taon lang ang exemption, na mula lang noong July 6? Panloloko ito at hinding-hindi ako papayag dito," he said.

"Hindi pwedeng rason ang magiging revenue loss gawa nitong batas. Naintindihan na ng mga kongresista ang impact nito sa koleksyon ng gobyerno, at sinadyang bigyang ginhawa ang mga minimum wage earners para sa buong taon. Mahalagang-mahalaga ito, sa hirap ng buhay ngayon," he added.

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