Tax Exemption For RP Minimum Wage Earners Urged

By Jherlyn Meneses/

LOS ANGELES – Despite the 7.3-percent economic growth in 2007, the continuous increase in the prices of food and other commodities exert much pressure on the consuming public. With the looming rice crisis, the consumers’ plight compound further.

To cope with the existing economic situation and to ease the people’s burden, the House Committee on Ways and Means was urged to convene immediately and act on a law that seeks to exempt minimum wage earners from paying income taxes, as a gift to laborers in commemoration of Labor Day on May 1st.

Valenzuela Rep. Magtanggol “Magi” Gunigundo II, Chairman of House Committee on Labor, said that the proposed income tax exemption will greatly ease the burden of the minimum wage income earners from the soaring prices of basic commodities.

He added that the government will be capable of absorbing the estimated P607 million tax loss once the measure is implemented.

“It will be complemented by a congressional-executive consensus to pass a bill that will exempt minimum wage earners in the private sector and government workers in the lower rungs of the bureaucratic pay scale from paying a tax,” said Gunigundo who also welcomes the 10 percent wage hike increase for the government employees as directed by President Arroyo effective June 1, 2008.

Davao del Norte Rep. Anton Lagdameo, meanwhile, suggested that the 10 percent wage hike should also be applied to the local government units and state corporations like the previously implemented Executive Order (EO) 611 which grants a 10 percent wage hike to government-owned and controlled corporations (GOCC’s).

The Department of Finance previously urged the congress last February 2008 to prioritize this year the passage of the bill seeking to exempt minimum wage earners from the income tax. Notwithstanding the estimated revenue loss for the government, they expressed their full support behind the proposal to provide relief to all minimum wage earners. The department said that an estimated 365,317 minimum wage earners stood to benefit from the tax exemption proposal.


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