Saturday, 21 June 2008

Good News to all Employees! (But is this a real good news to the gov't people as well?)

Just this week, President Gloria Macapagal-Arroyo has signed into law a bill that would exempt minimum wage earners from paying income tax and increasing personal exemptions for other employees.

According to the news, the law aims to provide financial relief to taxpayers in cognizance by the government of the hard times brought by multiple factors, including the current rice crisis, oil price hikes and the heightening inflationary pressure on commodities of all kinds and to help reduce the wide tax gap in the taxation of self-employed and professionals.

What I mostly like about this law is that all holiday, night differential, hazard, and overtime pay would also be tax-exempt. As said by Manuel Roxas.

Yes, I heard that the law said it's ALL. (in favor to Brix and I who usually take overtime skeds, wow, I now wonder how much our take home pay would be- har har). Although I'm quite thinking, would this law be straight-forward or would this law say one thing and mean another?

Anyhow, for other salaried workers, the measure would allow an employee earning P455 per day or P10,010 per month to have an additional take-home pay of P472.59 per month or P5,671.02 per year if unmarried; P678.50 per month or P8,142.04 per year as head of the family; and P580.92 per month or P6,971.02 per year for those married with four children. Do your math now as I am not good at it. But pretty much for me, that additional income will augment my budget for Christmas.

Now, for an employee earning P683 per day or P15,026 per month would have an additional take-home pay of P545.26 per month or P6,543.10 per year if unmarried; P1,307.18 per month or P15,686.20 per year as head of the family; and P1,190.52 per month or P14,286.20 per year for those married with four children. Now in this case I wonder why the head of the family takes home more pay than the one who is married with children? Hmmm?

Now where is the goverment going to get back the estimated P14 billion/year loss because of this new law? The law said the government hopes to recover the loss through the optional standard deductions (OSD), which will “simplify the filing of income tax returns and benefits, in particular, professionals and medium, small, and micro entrepreneurs. Yeah, right... they hope.

Still, this is one good reason to celebrate for us employees. (^_^)v
I'd like to thank Irene Mijia who forwarded this msg to my Outlook ;)

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