Press Release
October 3, 2008

ROXAS, LABOR GROUPS UNITE, PETITION SC TO ORDER FULL TAX EXEMPTION FOR WORKERS IN 2008

Liberal President Senator Mar Roxas, backed by the country's major labor organizations, asked the Supreme Court today to order full implementation this year of the tax exemption for minimum wage earners in opposition to the Bureau of Internal Revenue and the Department of Finance's guidelines limiting application of the new tax relief law.

In his petition, Roxas told the Supreme Court that the BIR guidelines for Republic Act No. 9504 passed June this year violated the intent of Congress and imposed restrictions that were not in the law and would effectively deny the privilege to many.

The country's major labor groups-the Trade Union Congress of the Philippines, Alliance of Concerned Teachers, COURAGE and Alliance of Progressive Labor-all expressed support for Roxas' petition.. Roxas is principal author of Republic Act No. 9504, which exempts minimum wagers from income tax and increased personal exemptions for other workers..

"Malinaw sa batas na ang gusto ng Kongreso ay bigyan ng ginhawa ang ating taumbayan. Hindi ipinasa ang batas na ito para gawing kalahating taon lang ang tax exemption ngayong 2008. Kaunting benepisyo na nga lang ay pinagkait pa sa taumbayan," he said.

Under the implementing rules and regulations (IRR) issued by the BIR and the DoF, the tax exemption would take effect only from July 6 this year, and not from the start of the year. Roxas noted that the Supreme Court had already ruled in favor of tax exemptions for income earned prior to the date of effectivity of a law increasing personal exemptions, in 1992. In Umali vs. Estanislao, the Supreme Court ruled that this law, RA 7167, could apply from the start of 1991, even though it was made effective January 30, 1992.

"Ang pinaglalaban dito ay P36 bawat araw, mula Enero. Ito ay katumbas ng isang kilong bigas, o kaya ay tatlong de latang sardinas bawat araw. Malaking bagay ito lalo na sa panahong ito ng nagtataasang presyo. Bakit mas gusto ng pamahalaan na tanggalin sa kamay ng taumbayan ang perang para sa kanila?" he asked.

"With the poor workers and their families, every little bit of financial relief matters. By easing their burden of paying income tax, they are given opportunities to put their money to daily essentials as well as savings. Minimum wage earners can no longer afford to be taxed and to be placed in the cumbersome income tax process in the same manner as higher-earning employees. It is the Government's obligation to ease their burden to the fullest extent possible," Roxas said in the petition.

Congress, Roxas also noted, did not intend to limit the benefit to those who are not receiving additional benefits and allowance as mandated by BIR under the implementing rules for RA 9504.

"Saan nanggaling itong sinasabi ng BIR na pag may extra kang allowance ay hindi ka na tax exempt? Gumawa sila ng limitasyon na wala naman sa batas. Ang gustong proteksyunan ng BIR ay ang kuleksyon nila, hindi ang kapakanan ng naghihirap nating taumbayan," he said.

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