A look at the newly proposed tax bill ~ Pinoy Reviews

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Thursday, April 24, 2008

A look at the newly proposed tax bill

Some of my officemates were overly excited about the proposed tax bills. I’ve read in the papers that solons are boasting that they will provide P150,000 in tax exemption. For some, the word “exemption” alone is a positive thing, however, the P150,000 tax exemption is the maximum exemption for married couples WITH dependents. Not all of us would automatically get a P150,000 exemption.

I haven’t read up on my tax laws but if memory serves me right, persons with a civil status of “single” have a 25,000 tax exemption so if a married person’s tax exemption would increase from 32,000 to 35,000 from the proposed tax bill, that would be an additional 3k exemption (I’m just speculating here since I haven’t read the whole tax bill and my only source is a newspaper report).

So basically, those who would greatly benefit from this proposed tax bill are married couples with dependents. BTW, if you have dependents that qualify for exemption, under the bill, it would be increased from P8,000 to P20,000. So in order to get the maximum P150,000 exemption, you would need to be married with four dependents.

Then the solons are also working on the simplified net income taxation for professionals and single proprietors. What it means is more tax for professionals and entrepreneurs. So what they’re doing is they’re just dangling this juicy tax bill in order to appease Filipinos and try to convince them that they’re doing something to ease their hardship but with their other hand, they’re snatching it away. I mean, why the hell would they allow revenue loss and risk their pork barrel shrinking?

What the administration should do is whip up those at the BIR in order to increase their tax collecting efforts and eradicate corruption.