Tuesday, May 13, 2008

Raise the (Tax Exemptions) Roof!

Kudos to the Lower House for actually doing something! Hurrah!

Members of the House of Representatives yesterday voted to approve House Bill No. 3971, which seeks to grant a uniform personal tax exemption of P50,000. The bill also seeks to raise the exemption of each of four dependents to P25,000, from the current P8,000.

The current law also provides that single individual has an annual tax exemption of A P20,000; a head of the family has exemption of P25,000; and a married individual has a P32,000 exemption.

This all seems good on paper. After all, such tax relief is very much welcome amid rising prices of rice, gas and Caramel Macchiato.

I'm no economist, but where will the government get all the money to offset the expected revenue loss? According to the Inquirer news report:

At the same time, the bill seeks a simplified net income taxation (SNIT) scheme for the self-employed and professionals. XXX

Under the proposed SNIT, a 40 percent discount will be given to self-employed and professionals to encourage them to declare their income.

XXX the government is expected to raise an additional P14 billion pesos from this scheme or a net gain of P1 billion to P2 billion minus the expected losses from the higher tax exemptions.

Um, yeah...

Anyway, I have a feeling that we will not recognize this House Bill after the final Final Bill comes out of Bicam. So honest taxpayers all over the country, I hate to piss at your fun, but don't keep your hopes up just yet.

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