President Gloria Macapagal-Arroyo on Tuesday signed a new law exempting from income tax payment all Filipino workers who are earning only minimum wages. The law also increases the tax deductions for personal exemptions for other employees. Under the new law, the tax exemptions will provide additional take-home pay of 34 pesos a day or 750 pesos a month for minimum wage earners. The new law also increases personal exemptions for salaried workers. All holiday, night differential, hazard and overtime pay will also be tax exempt for minimum wage earners, both from the private and government sectors. Sen. Francis Escudero, one of the principal authors of the measure, said the government stands to lose 14.25 billion pesos yearly in tax collections from the new law including 3.16 billion pesos from minimum wage earners and 11.09 billion pesos for additional exemptions. Jess Arranza, Federation of Philippine Industries president, said the new law is expected to uplift the lives of ordinary Filipino workers. Senator Manuel Roxas II said under the new law, an employee earning 455 pesos per day or 10,010 pesos per month would have an additional take-home pay of 472.59 pesos per month or 5,671.02 pesos a year if unmarried; 678.50 pesos per month or 8,142.04 pesos a year as head of the family; and 580.92 pesos per month or 6,971.02 pesos a year for those married with four children. Roxas said the workers could spend the additional money on the family's needs such as food, medicine and tuition, especially with the rising cost of fuel and basic commodities. Of the estimated 2.484-million compensation income tax filers in 2004, about 87% are minimum wage earners, based on a Senate data. “This new law will provide relief and additional money to spend for our workers, which is needed more than ever at this time of continued increases in prices,” Roxas said. “We have fought for this for a long time. Many Labor Days have come and gone wherein we fought for this for our workers, and at last, income tax exemption of minimum wage earners is now a law,” he added. Congress automatically ratified the bill after the House of Representatives adopted the Senate version without bicameral conference committee meetings. __
