Economic Invasion of the Philippines
Felixberto Baguyo, Jr. posted Wage Increase A Must where he stated that wages in the Philippines aren’t rising despite the rise in cost of living. He pointed the reason that the government did not want to incur additional cost to the investors – who are foreigners and are growing in population. He is correct, however that is not why my heart is heavy on this matter.
OFW population keeps rising. We work for foreigners, while the foreigners are invading us ecconomically and making use of our resources to further advance their economies. Basically what is happening is that the foreigners are taking advantage of the resources that our social studies teachers are praising that we have plenty of, while our own people are shipped outside the country to become slaves of other nations.
It’s really frustrating because we should be the ones to take advantage of our own resources, but what is the government doing? We are deprived of our own possession, instead they are offered to the our masters. We don’t realize it yet, but we really are being colonized. We are once again under the control of other nations.
2 Responses to “Economic Invasion of the Philippines”
By matt27 on Apr 29, 2008 | Reply
just want to share this….
The Tax Reform Act, A Decade Old
Republic Act 8424 (Philippine Law), otherwise known as the Tax Reform Act of 1997 or the Revised National Internal Revenue Code (NIRC) of 1997, which became effective in 1998, is already more than a decade old law. It’s basically a comprehensive law that covers all national taxes from income tax for individuals and corporations, estate and donor’s tax, value added tax, other percentage taxes, excise tax on certain goods, and documentary stamp taxes.
The law is old enough that, as a matter of fact, certain provisions have already been revised just like the income tax for corporations and the Expanded Value Added Tax. What marvels me is why there’s no change, or at least any proposed changes underway (none that I heard of), in income tax for individuals.
The Philippine taxation since 1997 provides for a graduated income tax rates for individuals (net of personal exemptions) as follows:
Not over P10,000 5%
Over P10,000 but not over P30,000 P500 + 10% of the excess over P10,000
Over P30,000 but not over P70,000 P2,500 + 15% of the excess over P30,000
Over P70,000 but not over P140,000 P8,500 + 20% of the ecess over P70,000
Over P140,000 but not over P250,000 P22,500 + 25% of the excess over P140,000
Over P250,000 but not over P500,000 P50,000 + 30% of the excess over P250,000
Over P500,000 P125,000 + 32% of the excess over P500,000
According to the National Statistics Office, average family income from 1997 to 2006 increased from P123,000 to P172,000. That represents around 40% increase during that 10 year period. Definitely, at least a bracket leap in the progressive tax table.
The 1997 Tax Code has always been biased against the individual income taxpayers, in a sense that unlike corporations, individuals cannot claim any other deductions aside from the fixed personal exemptions (while corporations have the ability to manipulate their earnings, thus the income tax, through dubious deductions and expenses–thanks to the vague law). And it’s old, outdated, obsolete!
RA 8424 superseded the three-year old NIRC of 1994, thus in itself, eleven years in effect and counting, it necessarily needs a major rewrite.
By matt22 on Jun 17, 2008 | Reply
IT’S NOW A LAW–President Gloria Macapagal-Arroyo signed Tax Relief for Minimum Wage Earners Act (Republic Act 9504) into law Tuesday (June 17, 2008)
President Gloria Arroyo has signed Republic Act 9504. This new law will exempt minimum wage earners from paying income tax, increasing tax exemption for all earners and additional exemptions for individuals with dependents/children.
This means that anyone earning at least the minimum wage in his/her region will not pay income tax.
All individuals will have a maximum of P50,000 annual income tax exemption. This simply means that a person earning a gross annual salary of P180,000 (excluding the mandatory 13th month pay, which is tax free) per year will only pay income tax on the P130,000. The new exemption is for all persons whether single, married or head of the family. In the old tax code, RA 8284 it gave single individuals only a P20,000 exception, head of families P25,000 and married individuals P32,000.
For married couples, the new law increase the additional exemptions based on the number of their children. In the old law, each couple is allowed an exemption of P8,000 per child up to 4 children. The new law increases the exception to P25,000 per child up to 4 children. Therefore, a family with four children will have a maximum exemption of P200,000. It is a substantial increase from the previous P96,000 per family with four children.
Illustrations:
A single individual earnings P15,000 per month gross/P195,000 per year gross
Then Now
A. Salary in Twelve Month 180,000 180,000
B. 13th Month Pay 15,000 15,000
C. Total Annual Income (A+B) 195,000 195,000
DEDUCTIONS
D. SSS 6,000 6,000
E. PHILHEALTH 2,250 2,250
F. PAG-IBIG FUND 1,200 1,200
G. TOTAL DEDUCTIONS (D+E+F) 9,450 9,450
H. AFTER DEDUCTIOS (C-G) 185,550 185,550
EXEMPTIONS
I. 13TH Month Pay up to P30,000 15,000 15,000
J. STATUTORY EXEMPTIONS 20,000 50,000
K. TOTAL EXEMPTIONS 35,000 65,000
L. NET TAXABLE INCOME (H-K) 150,550 120,550
INCOME TAX 25,137.50 18,500
DIFFERENCE 6 673.50
NET TAKE HOME PAY 169,862.50 176,500
Notes:
(1) The illustration will not apply to everybody’s case. Please consult a licensed accountant, tax advisor or your human resources department to know how the new law will affect you specifically.
(2) The SSS, Pag-IBIG Fund and Philhealth contributions are based on a monthly salary of P15,000 per month.
(3) This is how the income tax is computed as per RA8424 Chapter 3 Section 24 (see below):
Then: P22,500 + ((P150,550 - P140,000) x 25%)
Now: P8,500 + ((120,550 - P70,000) x 20%)
RA8424 Chapter 3 Section 24:
“The tax shall be computed in accordance with and at the rates established in the following schedule:
“Not over P10,000 –> 5%
“Over P10,000 but not over P30,000 –> P500+10% of the excess over P10,000
“Over P30,000 but not over P70,000 –> P2,500+15% of the excess over P30,000
“Over P70,000 but not over P140,000 –> P8,500+20% of the excess over P70,000
“Over P140,000 but not over P250,000 –> P22,500+25% of the excess over P140,000
“Over P250,000 but not over P500,000 –> P50,000+30% of the excess over P250,000
“Over P500,000 –> P125,000+34% of the excess over P500,000 in 1998