Contrary to the provisions of a new law, the Bureau of Internal Revenue (BIR) failed to exempt minimum wage earners from paying taxes in July, which was when a higher minimum wage took effect, according to an accounting firm.
Lawyer Benedicta Du-Baladad, Punong-bayan & AraulloTax Advisory & Compliance head, said the government has no reason to incur a higher deficit last month given that the tax relief for minimum wage earners was not immediately implemented.
“They are not giving yet the full benefit. It has no effect in terms of revenues,” she said.
Buladad said the accounting firm has received numerous complaints from minimum wage earners on the deduction of taxes from their salaries.
Because of this, Punongbayan & Araullo said employers should make a tax refund of P39 a day starting July up to December this year.
In June, President Arroyo signed into law a measure exempting minimum wage earners from paying income tax and raising the personal exemptions of above-minimum wage earners. The law, Republic Act 9504 amended several sections of RA 8424 otherwise known as the National Internal Revenue Code of 1997.
The government’s budget deficit grew 33 percent to P53.4 billion at end-September from P40 billion in the same nine-month period last year, after the BIR’s collections fell short of target. The end-September financing shortfall is also higher than the P35.1 billion expected for the period.
