Senators junk tax exemption limits on dependents

MANILA -- A bill seeking to lift the limit on the number of qualified dependents that a taxpayer may claim on tax deduction was approved by the Senate on third and final reading on Monday.

Under Senate Bill 2855 sponsored by Senator Ralph Recto, dependents will now include children born outside of wedlock and parents who are dependent on the taxpayer for support and are living with him or her.

Also covered are parents, regardless of income, who are incapable of self-support because of mental or physical disability.

At present, Section 35, paragraph B of the National Internal Revenue Code of 1997 limits the number of dependents to only four at P25,000 per person, which the bill or Family Care Act of 2013 tries to abolish.

While the cap on the number of dependents was established in 1973 to promote family planning, Recto said the tax code discriminates large families.

Citing a study conducted by the Commission on Population, Recto said "only women in the lowest and second lowest wealth quartile have four or more children" and they are not even income tax payers.

He added that setting a limitation on the number of dependents has no bearing on the family planning decisions of couples.

"The impact of the bill is on the economic reprieve that will be granted to families, alleviating the financial difficulties of taxpayers with more children, and allowing individuals to cope with the cost of caring for parents and legitimated children or children with disabilities," said Recto.

Also approved on Monday was Senate Bill 3345 or the Anti-Cable Television and Cable Internet Tapping Act of 2012.

The bill penalizes illegal tapping of any signal offered over cable television (CATV) or cable internet system and the malicious destruction or removal of authorized CATV or cable internet facilities.

It also prohibits recording, reproducing, distributing, importing or selling of any intercepted or received CATV system/network signals for commercial purposes without the authority of the concerned CATV or cable internet service provider.

In a recent hearing called by the committee on public information and mass media, it was reported that there is an estimated 1.5 million unauthorized cable connections as opposed to 2 million legitimate cable subscribers.

This resulted in losses that legitimate cable television operators suffer from cable pilferage, lost market share, higher programming cost and foregone revenue.

In 2004 alone, Senate President Juan Ponce Enrile said the cable industry reportedly lost P3.92 billion from signal theft and illegal connections. It went up to P5 billion the following year. (Virgil Lopez/Sunnex)