Arroyo to workers: Vote for TU bets, get tax exemption

Minimum wage workers could finally get exempted from paying income taxes if only they would vote for candidates of the administration’s Team Unity. This is the supposed reward that President Gloria Macapagal Arroyo dangled to workers’ groups in her Labor Day speech on Tuesday at the Folk Arts Theater in Pasay City. “Ito naman masasabi ko para sa Team Unity congressmen at senador. Kung sila mananalo, puwede ring i-commit sa inyo na itong darating na Congress, magpapasa tayo…ng batas na exempted ang minimum wage earners sa pagbayad ng income tax (This is what I can say for Team Unity congressional and senatorial bets. If they would win, I can commit to you in the next Congress that we will pass a law that would exempt minimum wage earners from paying income tax)." This announcement of Mrs Arroyo in a gathering that looked more like a campaign sortie than a workers’ day celebration, received applause from some 5,000 workers at the FAT. Meanwhile, Akbayan party-list Rep. Ana Theresia "Risa" Hontiveros said workers should not believe Mrs Arroyo's promise. She said the administration in fact blocked the passage of a bill that would have given minimum wage earners tax exemptions. "It is an outright lie. It's as if the paucity of her so-called non-wage benefits is not enough, she still has to lie about it," said Hontiveros. Hontiveros authored House Bill 4865 (substituted with HB 5296) that would have granted tax exemptions for minimum wage earners. She said the bill was filed immediately after the imposition of the expanded value-added tax. The measure seeks to amend the Internal Revenue Code to increase non-taxable income to 50, 000 annually, with corollary increases in tax exemptions for different wage brackets. Under the bill, a family with an annual income of P 200,000, for instance, would only pay P22, 600 in taxes instead of P37, 500 in the current tax schedule. Hontiveros said the bill was already approved on third and final reading last year and a similar measure was approved by the Senate. However, she the administration-dominated House Committee on Ways and Means refused to hold a bicameral conference to enact the bill. "It is an empty promise. The administration could have pushed for the approval of the bill if it were sincere with its non-wage benefits for workers," Hontiveros said. The labor groups that were present at the FAT included the Trade Union Congress of the Philippines, Federation of Free Workers, Trade Unions of the Philippines and Allied Services and the Philippine Government Employees Association. The President said that what she was able to do so far was to only issue an order exempting minimum wage earners from withholding tax deductions. Mrs Arroyo, in a memorandum to Finance Secretary Margarito Teves in December 2005, ordered that minimum wage earners in the private sector and their counterparts in the government sector (Salary Grades 1-3) be exempted from the collection of withholding tax effective Jan. 1, 2006. The Bureau of Internal Revenue implemented the order under Revenue Regulation 1-2006. The President ordered the finance department to draft a legislative proposal restructuring the income tax system for salaried individuals to reduce or remove the income tax burden on the low- and middle-income groups. She has also directed the finance department to pursue a package of income tax-related reforms and efficiency measures next year in order to broaden the income tax base and improve tax collections from self-employed individuals and professionals. Also in her speech, Mrs Arroyo ordered the regional wage boards to “speed up the resolution of pending wage issues." She said the 10 percent salary increase of government workers would be effective on July 1, 2007. She thanked the workers from the moderate labor groups twice for not joining attempts to destabilize the economy and her government. She scored those who criticize her administration’s job generation, saying it was able to generate one million jobs per year, unlike the Estrada administration which created only 500,000 jobs in two years. She said 1.5 million jobs were created in January 2006 to January 2007. The President also said that under her government, the minimum wage shot up by P100 per day. - GMANews.TV