The bill sponsored by Senator Francis “Chiz” Escudero for exempting minimum-wage earners from paying income tax and increasing personal and additional exemptions to all taxpayers was passed in both chambers and signed into law by Pres. Gloria Arroyo.The foregone revenue from the exemption of minimum-wage earners and the exclusion of their overtime pay, night differential, holiday pay and hazard pay from income tax including increase in personal and additional exemptions for all taxpayers is P14.25 billion. This amount is targeted to be compensated by the P15.03 billion to be earned with the 40-percent Optional Standard Deduction not only for the self-employed and professionals but also for corporations.
With the increase in personal exemptions, a salaried employee earning P10,010 a month would have an additional take-home pay of P5,671.02 a year if unmarried; P8,142.04 a year as head of the family; or P6,971.02 a year if married with four children.
An employee earning P15,026 a month would have an additional take-home pay of P6,543.10 a year if unmarried; P15,686.20 a year as head of the family; and P14,286.20 a year if married with four children. - Manila Times
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