greatbarrier
08-12-2008, 12:26 PM
I just want to share this article written by a colleague in the Philippines who was a TMAP (Tax Management Association of the Philippines) president.
This article is about Republic Act (RA) 9504 exempting minimum wage earners from income tax and increasing the personal tax exemptions of individuals. Some of you may have heard or read about this law which was promulgated sometime around July. Now, since the BIR is the implementing body as far as tax is concerned, it shall be the one to issue the Implementing Rules and Regulations (IRR) of any tax law, such as RA9504.
In the BIR draft of the IRR that was issued for comments recently, the BIR interprets that the application of the increased exemption takes effect on the effectivity of the law, meaning, it shall be pro-rated for the year 2008, and that the old lower exemption applies prior to the effectivity of the law. Needless to say, the individual taxpayers will not be able to reap the full benefits of RA9504.
As this law is a social legislation, the law should be construed favorably to the individual taxpayers. As such, personal exemption should be construed to apply at the start of the calendar year (taxation year of an individual taxpayer), which is not what the BIR draft contains.
Even though we, as OFWs, being exempt from tax, are not affected, our families and relatives who are in the workforce ang tatamaan ng IRR ng BIR. Why don`t they just let the Filipino workforce be fully benefited by RA9504 by getting the higher take home pay that they have been expecting since this law was promulgated?
Anyway, napahaba na ang intro ko.... Pakibasa na lang ng article. Maraming violent reactions syempre from the people and professional organizations na ibinabato sa BIR.
Here`s the link to the article published in Business World... READ HERE (http://www.bworldonline.com/BW081208/content.php?id=055)
This article is about Republic Act (RA) 9504 exempting minimum wage earners from income tax and increasing the personal tax exemptions of individuals. Some of you may have heard or read about this law which was promulgated sometime around July. Now, since the BIR is the implementing body as far as tax is concerned, it shall be the one to issue the Implementing Rules and Regulations (IRR) of any tax law, such as RA9504.
In the BIR draft of the IRR that was issued for comments recently, the BIR interprets that the application of the increased exemption takes effect on the effectivity of the law, meaning, it shall be pro-rated for the year 2008, and that the old lower exemption applies prior to the effectivity of the law. Needless to say, the individual taxpayers will not be able to reap the full benefits of RA9504.
As this law is a social legislation, the law should be construed favorably to the individual taxpayers. As such, personal exemption should be construed to apply at the start of the calendar year (taxation year of an individual taxpayer), which is not what the BIR draft contains.
Even though we, as OFWs, being exempt from tax, are not affected, our families and relatives who are in the workforce ang tatamaan ng IRR ng BIR. Why don`t they just let the Filipino workforce be fully benefited by RA9504 by getting the higher take home pay that they have been expecting since this law was promulgated?
Anyway, napahaba na ang intro ko.... Pakibasa na lang ng article. Maraming violent reactions syempre from the people and professional organizations na ibinabato sa BIR.
Here`s the link to the article published in Business World... READ HERE (http://www.bworldonline.com/BW081208/content.php?id=055)