Minimum wage earners get tax relief
(By Michael Lim Ubac, Philippine Daily Inquirer, 06/18/2008)
Republic Act No. 9504 exempts minimum wage earners in the private sector and their counterparts in the public sector (casual employees) from paying income tax.
Personal exemptions up
The law increased the amount of personal exemption from P25,000 to P50,000 for all taxpayers regardless of status (single, married or head of the family), and the additional deduction for qualified dependents from P8,000 to P25,000.
Thus, a family of six, with two working spouses and four dependent children, will have a total of P200,000 in personal exemptions (from the current P96,000).
In case only one of the spouses is earning, he or she shall be allowed the standard personal exemption of P50,000.
The law defines a “dependent” as a “legitimate, illegitimate or legally adopted child” living with the taxpayer and not more than 21 years old, unmarried and not gainfully employed.
These provisions eliminated the old tax bracketing system under the 1997 National Revenue Code, as amended, which had specified tax exemption of P20,000, P25,000 and P32,000 for single, head of the family and married, respectively.
PERSONAL EXEMPTIONS
………..Before (in pesos)…. Now (in pesos)
Single ………….20,000 ………50,000
Head of Family.. 25,000……… 50,000
Married …………32,000……… 50,000
Each Qualified Dependent
(Not exceeding 4) 8,000…….. 25,000
Family of 6 (Two working spouses,
4 dependent children) 96,000… 200,000
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