Saturday, October 04, 2008 Full implementation of tax exemption sought
SENATOR Manuel Roxas II filed Friday a petition before the Supreme Court (SC) seeking to compel the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to implement on a full-year basis the tax exemption for minimum wage earners.
In a petition for certiorari and mandamus, Roxas asked the high court to nullify several provisions in the implementing guidelines under Republic Act (RA) 9504 exempting minimum wage earners from the burden of income taxation and increasing the personal and additional exemptions of taxpayers.
Assailed in the petition was BIR's Revenue Regulation 10-2008, which limited the application of Republic Act (RA) 9504 to a half-year basis, specifically commencing only on July 6, 2008.
Section 1 of RR 10-2008 taxes the entire salary, wage, and allowance of a minimum wage earner the moment he or she receives benefits in excess of P30,000.
Roxas said RR 10-2008 is contrary to the legislative intent to make the law applicable to compensation or income received beginning January 1, 2008 or on a full-year basis, and limits the definition of a minimum wage earner, at the same time imposing restrictions that were not in the law.
"Thus, instead of helping our workers, the issuance RR 10-2008 necessarily curtailed the supposed complete enjoyment of the benefits they are legally and rightfully entitled, all to the detriment and prejudice of our minimum wage earners and their families, who are now on the verge of poverty," the petition, prepared by lawyer Randall Tabayoyong, stated.
Roxas said the salary, wage, and allowance of a minimum wage earner is absolutely exempted, without any condition or qualifications, and thus not subject to tax in any manner, regardless of the amount of other benefits.
He pointed out that the SC 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, citing the Umali vs Estanislao case.
The high court, in that case, ruled that tax exemption law could apply from the start of 1991, even though it was made effective January 30, 1992.
"If a law that took effect on January 30, 1992 was made to apply to compensation income earned or received on January 1, 1991, all the more that RA 9504 that became effective July 6, 2008 should be made to apply to income earned or received on January 1, 2008, considering that the latter law not only took effect on the same year but also shorter in time compared to the situation in Umali vs Estanislao," the petition said.
Roxas further clarified that the definition of a minimum wage earner in RA 9504 "gives no room for doubt that the law does not give any qualification as to who are minimum wage earners, regardless of the amount of benefits a worker receives."
Named respondents in the suit were Finance Secretary Margarito Teves and BIR Commissioner Lilian Hefti.
RA 9504, of which Roxas was the principal author, amended the National Internal Revenue Code of 1997 (RA 8424). On September 25, or three months after the enactment of RA 9504, the BIR issued the assailed IRR.
In his assessment of the IRR, the senator said he found that it has serious financial repercussions among workers and their families considering it will affect their purchasing power, and which would have been strengthened if the true intent and spirit of the law would be followed.
Roxas added that he wrote a letter to Teves on September 26 but "because of the magnitude and urgency of this matter, petitioner can no longer wait for the action or inaction of respondents, considering the uncertainty in the international financial markets; the ongoing global economic slowdown; and the continuous rise in the prices of basic commodities."
Roxas's petition was backed by the country's major labor groups like the Trade Union Congress of the Philippines, Alliance of Concerned Teachers, and Courage and Alliance of Progressive Labor. (ECV/Sunnex)
