New tax reform brings relief to individual taxpayers - BIR
By Rose B. Palacio
Davao City (21 August) -- President Gloria Macapagal-Arroyo signed RA No. 9504 entitled "An Act Amending Sections 22 and 51 And Republic Act 8424, As Amended, Otherwise Known As The National Revenue Code.
Under the new law, minimum wage earners in both private and government sectors shall now be exempted in the payment of income tax.
Bureau of Internal Revenue (BIR) regional director Atty. Marcelinda Omila-Yap said income tax exemption extends to their wage and work-related benefits, holiday pay, overtime pay, night shift differential pay and hazard pay.
There are more than half a million wage earners in both private and public sectors, who are presently still in the income tax net who will benefit from this new law.
RA 9504 formalizes the income tax exemption of minimum wage shall enjoy an increase in their personal exemptions and additional deduction of his civil status, an individual taxpayer shall now have a fifty thousand pesos (P50,000.00) personal exemption and an additional deduction of twenty-five thousand pesos (P25,000.00) for each dependent child, not to exceed four (4).
It was in 1998, through the passage of RA 8424, when the latest adjustment period of personal exemptions and deductions took place.
The new law adjusts upward the exemptions from P96,000.00 for a family of 6 (2 working spouses and four dependent children) to P200,000.00.
RA 9504, likewise, amends the Optional Standard Deduction (OSD) available for self-employed and professionals. From l0% of gross income, the OSD rate is now 40% of gross sales or gross receipts.
Because of this new law, Director Omila-Yap said a dialogue/forum is set on Sept 2 to be spearheaded by the Philippine Institute of Public Accountants. Venue will be announced by PICPA. (BIR/PIA) [top]