LIBMANAN, CAMARINES SUR -- Congressman Dato Arroyo, and two other Kabalikat ng Mamamayang Pilipino (Kampi) Congressmen Luis R. Villafuerte and Martin Romualdez (Leyte representative) have filed separate bills that exempt minimum wage earners from paying withholding taxes.

        Arroyo said House Bills 1140 and 1141 would grant additional tax exemptions to the minimum wage earners all over the country that would increase their earnings.

        He added that the additional tax exemption would add value to the income of minimum wage earners in the private and public sectors.

        Arroyo said that there is no clear-cut tax exemption scheme for minimum wage earners because the prevailing revenue laws and circulars from the Department of Finance (DoF) do no provide exemptions.

        The DoF has estimated that 13 percent of the total minimum wage earners are still covered by a potential net income tax liability.

        Arroyo said that the government would lose about P400 million if minimum wage earners are totally exempted from income taxes.

        But the congressman said that the P400 million is not a significant amount for the national government to forgo compared to the relief it would give the lowly wage earners.

        He said the government can earn the P400 million through other ways and means like strict collection of taxes from high-income groups and corporations.

        Arroyo said the House Bill 1140 if passed into law would increase the take-home pay of minimum wage earners while House Bill 1141 seeks to amend the National Internal Revenue Code of 1997.

        He said the revenue code provides multiple-bracketed income tax base and grants additional personal exemption to tax payers on case-to-case basis.

        Arroyo said the bill would amend Section 35 of the National Internal Revenue Code which grants P20,000 personal tax exemption to single individual and married persons, including those legally separated wherein the head of the family is granted P25,000-exemption and widow/widower/single parent with qualified dependents a P32,000-exemption.

        “It is proposed in the bill that a widow or widower or single parent with qualified dependents be entitled to personal exemption,” he added.

        Last August 6, the National Capital Region regional wage board approved P12/day salary increase with inclusion of P50 emergency cost of living allowance.

        Arroyo said that if enacted into law, House Bill 1140 would remove the imposition income tax to minimum wage earners in Metro Manila with their P362/day salary.