I've read an article on Manila Bulletin last Sept. 23, 2008, Tuesday, regarding the income tax exemption of individuals earning minimum wage or less, but with extra income from other small business sources like sari-sari stores and the like. The Department of Finance is in favor of this exemption while the Bureau of Internal Revenue thinks otherwise saying that individuals with other source of income other than that of the primary is not to be considered "poor" anymore. The Tax Management Association of the Philippines says that this exemption is to fulfill the president's promise, which is to help the poor cope up with the nonstop price hikes of the commodities.
After reading this article, I was on the "in favor" side, thinking that these individuals earning minimum wage or less, ought to be exempted whether they have extra sources of income or none because the minimum wage is not enough to provide for a family, knowing that Filipino families are usually big. I guess having extra income from micro businesses such as sari-sari stores doesn't make that much of a difference in their daily earnings. And one more thing, there's this law that exempts micro businesses from paying taxes. So, what's the point of exempting the business itself from the tax if the owner will be taxed, right? But, on second thought, I've realized that imposing tax is to promote equality among members of the society; and besides, these taxes are also for the betterment of the society, which includes these exempted individuals themselves. And I believe that it would be very difficult to identify minimum wage earners with micro businesses, they can even deny having it or pretend not to be the owner. It would be too costly and time wasting to conduct a research on small business owners and I doubt that the government will be willing to spend time , money and effort in doing research for they have bigger and more important things to worry about. And if ever these individuals earning minimum wage, but with extra income, really do get exempted, there would be a large decrease in the collection because in the present times, a big part of our population only earn at a minimum. Paying taxes is not heart breaking only if the payer sees where the taxes are being utilized. Sadly, here in the Philippines, everyone thinks that officials are corrupt that's why it hurts them so much to subtract something from what they've worked hard for and not seeing where it is being used, only to find out that it goes to someone else's pocket. I think minimum wage earners receiving extra income should not be exempted from paying the income tax for it is every citizen's duty to contribute something good to the society and to help the country improve and prosper. It all sums up to the administration's proper handling and allocation of tax for the people to be relieved when paying these taxes.
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I don't think exempting those who earn at the minimum or less would solve the problem we are facing today - the on going financial crisis, the bloating inflation and all, but rather I see this step as a bold way of redeeming the 'poise' of the Arroyo government.
Exempting these minimum earners from tax would just increase the burden of those who earn more, and yes I do think that would be unfair.
If only the Philippine government knows how to handle taxes well, and knows where it should go and what it is really for, then why not? I believe in such case, people would be more than willing to pay taxes.
Tax is a forced burden, charge, exaction and contribution assessed in accordance with some reasonable reasons of apportionment, upon persons or properties, by the sovereign power, for the purpose of raising revenue for the government.
Based on this description of tax in my bucotax, it says that tax should not exempt anyone, because it is a contribution of every person in the country since we are all benefiting of this, especially the poorer people.
However, with the article above, i think i won't say that i am in the "in favor" or "not in favor" side. I would just like to view out my opinion. I think exempting these people from tax might have a negative impact also, because they may take advantage of this privilege. On the other hand, if they do not earn the minimum wage, how can they even pay for taxes, if even sustaining theirs and their family's needs is a burden to them already.
With this issue, I say that maybe tax may be dependent on the status of people. The principle of the sound tax system include "theoretical justice" which states that a tax should be based upon a taxpayer's ability to pay. Maybe that is why in our country somehow tax is a burden to everyone, because sometimes the tax we pay does not go to where it should really go. If only all taxes paid by citizens go to their real cause, then I think it would be efficient enough to pay and that paying by the poorer people won't be a big deal since we can see where the taxes is going.
My point is that the issue may not be "should those earning less than the minimum wage be exempted" but the issue still relies on whether taxes goes to their real cause.
Well, I think it is fair to let the minimum earners enjoy tax exemption from the government. They have all the rights to be exempted because in the first place they can't even live a life of comfort. Plus, we are one society, one country, and we should learn howto protect our fellow people in every way possible.
Yes, it is unfair because what about those who earn about the minimum wage and still doesn't have enough for their family? Well, life is just like that. We all think that it is unfair to us that we have to pay our taxes and they don't but those minimum earners also think that life is unfair to them because they are not rich.
I think the government inly wnts to be fair to all and they want to give those people a chance to live a comfortable life, that way, our country will be ableto prosper because there will befewer poor people in the country.
Aside from that, I guess it is just fair since our government does not let us se the benefits that we should get from paying our taxes. We don't see the changes that's happening. We don't see the fruits of our money because the corrupt politicians keep those money in their pockets.
The government may say that they gave us subsidies, the fruits of our labor, but really, a 500 Peso subsidy is not enough for a family, it won't even last for a day. Aside from that, if the government really use our money wisely, why is it that the goods that are being sold in the market is very high, and why is it that our infrastructure is not that good?
For me, tax exemption is just the right thing to do, and I believe that this will lead to good results afterwards.
but to think that these people get the most out of government projects and activities because a normal citizen would prefer a private hospital rather than the typical public hospital where people with minimum wage (usually) go. Why? inequality. People desire equality (which in my opinion is impossible to achieve) and the idea of Income tax exemption forfeits the whole thing. Second. It indirectly promotes laziness on the "poor" people of the Philippines. They pay less tax thus they may work less than they need to. They may also want to work on minimum wage just to be exempted. That is why I am against it.
But on the other side of the coin. It will might make them happier and make their lives easier.
Exempting taxes for minimum wage earners will raise eyebrows of those who earn a little over minimum wage. I learned from the econtwo class that if some will be benefited because tax will be removed then some would suffer also. In this case those earning a little over minimum wage will be taxed more and in the end will receive less earnings compared to minimum wage earners.
Unfair!
We all hate the word Tax. It makes our lives ‘harder’ and products more expensive. This same word is what makes the Philippines survive, in some way or another.
I think that this tax exemption is not a solution to the problems of the minimum wage workers. In fact, maybe this can lead to abuse their exemption. In what way, I really don’t know. In order to avoid it the income tax should have more division like this
325 and Below > 3%
326 – 400 > 5%
Or something like that. This would make the obligation of the minimum wage workers lighter but not completely gone. That way, they can still contribute to the tax that the government ‘needs’ to make the lives of the poor easier.
Let’s just hope that the government would use the tax wisely
EQUITY vs. EQUALITY
TAX exempting is EQUALITY.
WE should have EQUITY.
As much as i want to agree with the income tax exemption, i cant because it doesn't promote equity. There shouldn't be and exemption because all of us are working hard for the money we earn. it's unfair that there are those who are exempted from paying high taxes.
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