Press Release
September 22, 2008


Contrary to the claim of Finance Secretary Margarito Teves, the newly enacted tax relief law should cover the entire year of 2008, Senator Chiz Escudero today said.

Escudero belied the claim of Teves that he agreed to the half-year coverage of the law, saying that he has already sent Teves the committee's official stand through a letter on the implementation of RA 9504.

Republic Act 9504 scraps the income tax on minimum wage earners while increasing tax exemptions for other employees.

"The Congressional Oversight Committee maintains its firm belief that the law must be made retroactive starting January 2008. During the last meeting I had with Secretary Teves, I told him about the committee's position and we agreed to let the courts decide on the matter".

In a letter dated September 16 of this year, Escudero and Congressman Exequiel Javier, Chairmen of the Congressional Oversight Committee on Comprehensive Tax Reform Program (CTRP), maintained that RA 9504 is a social legislation intended to provide relief to the plight of minimum wage earners or low income taxpayers.

The committee said there is no such thing as a half taxable year, pointing out as basis the court ruling on Umali v. Estanislao and Ingall v. Trinidad cases.

The two cases provide that new rates of personal and additional tax exemptions are available upon the filing of income tax returns on or before April 15 after the end of a calendar year.

Thus, when RA 9504 took effect on July this year, the new tax exemptions are practically available on or before April 15, 2009. Consequently, such tax exemptions apply to income earned or received in the calendar year 2008.

Escudero said the BIR should issue the law's Implementing Rules and Regulations (IRR) reflecting the true legislative intent and rightful statutory interpretation of RA 9504 otherwise the committee will be forced to go to court to push for the tax law's proper interpretation and implementation.

The senator said the committee can file in court a petition for certiorari, mandamus and prohibition if and when the BIR issues a regulation that is contrary to the intent of the Congress and contrary to the decision of the Supreme Court on the Estanislao case.

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