CHIZ TELLS BIR: TAX RELIEF LAW COVERS WHOLE OF 2008

Opposition Senator Chiz Escudero on Sunday reiterated his position that the tax relief law exempting minimum wage earners from income tax should cover salaries and wages of qualified beneficiaries for the entire 2008.

The senator issued the statement in light of the national government's position that the relief being extended by Republic Act 9504 to qualified taxpayers covers only half of last year.

"RA 9504 is a piece of social legislation aimed at alleviating the plight of our poor countrymen in these times of economic hardship. A contrary interpretation defeats the spirit behind the enactment of this law," said Escudero, who sponsored the bill as chairman of the ways and means committee in the Senate.

The law, which took effect last July 6, also increased the personal exemption for individuals as follows: single -- from P20,000 to P50,000; head of family -- from P25,000 to P50,000; each married individual -- from P32,000 to P50,000; and each qualified dependent (not exceeding four) -- from P8,000 to P25,000.

"This law was particularly designed to aid our fellow Filipinos from the low income group, particularly laborers. Their already meager salary and wage should now be exempted from income taxation for the whole of 2008 as it was Congress's intention that the law be made retroactive starting January 1, 2008," Escudero said.

The senator emphasized that as the deadline for filing tax returns approaches on April 15, the Bureau of Internal Revenue should follow what lawmakers envisioned in the law.

In September last year, ), Escudero, as co-chair of the Congressional Oversight Committee on Comprehensive Tax Reform Program (CTRP), joined Rep. Exequiel Javier in maintaining that RA 9504 is a social legislation intended to provide relief to the plight of minimum wage earners and low-income taxpayers.

He said the committee maintains its position that there is no such thing as a half taxable year, citing court rulings on the cases of Umali v. Estanislao and Ingall v. Trinidad.

The two rulings clearly state 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.

Therefore, Escudero said, when RA 9504 took effect in July last year, the new tax exemptions can be availed of this income tax filing season.

"As a consequence, such tax exemptions apply to income earned or received in the calendar year 2008," he said. Escudero also said that if the BIR insists on its erroneous interpretation of the law, the committee will be compelled to bring the issue to the appropriate court.