Press Release
July 2, 2007


Senator Mar Roxas sought to ease the financial burden of the country's 7 million workers earning minimum wage or less, by seeking through legislation, their exemption from paying income tax.

Roxas Senate Bill No. 103, filed last Saturday at the start of the 14th Congress, seeks to exempt minimum wage earners in the private sector as well as government workers in Salary Grades 1 to 3, by amending certain provisions of the 1997 National Internal Revenue Code.

"The intention of the bill is for government not to exact income tax from minimum-wage earners so that these workers could have more disposable income. Since most goods and services are subject to VAT anyway, these workers would still be able to contribute to the economy as consumers," he said.

In the National Capital Region, a minimum wage worker earns P300 daily, or P7,800 per month and P93,600 per year for work from Monday to Saturday. Of this, annual taxable income is P25,274.60. Applying the present 5% rate, the tax due a minimum wage earner is P1,727.46 per year, and P143.96 per month, an amount Roxas said matters a lot to families struggling to make ends meet.

Roxas said "Based on these figures, the extra monthly income made possible through enactment of SB 103 translates to over 6 kilos of rice, or an extra kilo of pork, or an extra 2 kilos of tilapia from the market. These extra savings can also be used to buy maintenance medicines or even vitamins for infants and children," Roxas said.

The senator from Capiz noted that every year, during Labor Day celebrations, tax exemption for minimum wage earners has always been part of the workers wish list.

"Its time we deliver on our promises to these workers by granting them, through law, this timely and vital non-wage benefit."

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