Pertinent Articles on RA 9504

There are pertinent articles regarding RA 9504 over at Punongbayan & Araullo’s Press Room. They describe the issues surrounding the law.

You can read the articles here, here, and here.

Many concerns have been raised, and my favorite:

Is this really what RA 9504 intended — to create and encourage absurd situations? Can’t the BIR, at least, read the real intent of RA 9504 and help promote social justice by saying that any income received by a worker over and above the minimum wage, to the extent that the tax distortion is eliminated and the take home pay is equalized, be still exempt from taxes as a MWE?

It may be difficult to justify such move, considering that the flaw is in the law itself. But the BIR was able to do it in certain instances in the past.

With these good, pertinent, and timely articles from an accounting firm website, P&A would have better hosted a discussion by offering comments or provided a forum. It would have been a good discussion, instead of just a lone standing article.

De Minimis Benefits under the NIRC

Disclaimer: The article that follow is my personal opinion, intended for discussion purposes only. It should not be construed as official opinion or regulation by any governmental agency that has authority over the matter.

Found this in my inbox:

Remy:
Can you help me understand what is the maximum amount of de minimis that could be extended to employees? What are other tax deductions can an employee have?
Thanks.

The National Internal Revenue Code of 1997 only mentions of De Minimis Benefits as one of the fringe benefits that are not taxable (Section 33.C). No definition whatsoever. As such, no explicit amount was provided for in the law.

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Republic Act 9504

An Act Amending Sections 22, 24, 34,35, 51 and 79 of Republic Act no. 8424, as amended, otherwise known as The National Internal Revenue Code of 1997

Looking at the stats of this site, I’m sure many are already looking for a copy of the law. I have good and bad news: the good news–I have a copy of the law; the bad–I have a bad copy.

Download: RA-9504 pdf (440kb)
[adsense]

As expected, there were no changes in the progressive tax table. Our lawmakers and our President sure have gained credits for themselves for passing the bill into law. But it only did affect the personal exemptions allowed for most of us taxpayers. Only a part of the taxable income was adjusted, not the whole.

Come to think of it, rice in 1997 was (at the maximum, maybe) P20 per kilo. Now, how much is it? You can answer that question. That’s basically how inflation has gone up since 1997, when the original law (RA 8424) was enacted.

The Tax Exemption Bill

According to this news, the approval of the tax exemption bill that’s been pending in the Senate was rushed. I say this has long been overdue.

MANILA, Philippines — With three weeks left before Congress goes into recess, the Senate is rushing the approval of a long-awaited measure that seeks to exempt minimum wage earners from paying the income tax.

But with the inflation since 1997, the brackets in the progressive tax table definitely needs as much adjustment as the personal exemption. Otherwise, it would just be like saving the lowly taxpayers a meal a day when they eat three times a day.

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Filipino Auditors in Inquirer News

Published today (May 16, 2008) in the Philippine Daily Inquirer an article by Ms. Edel Mary D. Vegamora, CIA, the CIA Country Coordinator-Philippines, the revised version of her earlier article (posted here), this one entitled, “Filipino Auditors on Top of the World”.

Excerpt follows:

There is more reason to rejoice as we have 217 more CIAs in the Philippines, the highest passing figure so far since the CIA examination was conducted in the Philippines. There was a deluge of examinees in November 2007, 496 to be exact, when The Institute of Internal Auditors Inc., International announced in January 8, 2007 that they would shift from paper to computer-based examinations beginning 2008.

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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.

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Filipinos on Top of the World

Related to the article I posted a while ago, here’s another article written by Edel Mary D. Vegamora, the CIA Country Coordinator for the Philippines.

(Note: this was originally posted in her multiply blog, “From Edel’s Observation Deck“, which is the same article published as a pdf file in the IIA Philippines website. The article was reposted with the permission of Ms. Edel Mary herself.)


FILIPINOS ON TOP OF THE WORLD: GOLD MEDALLIST & GLOBAL AWARDEES
Written for IIA by: Edel Mary D. Vegamora
CIA Country Coordinator-Philippines

In the midst of the present local political controversies, further aggravated by the disturbing developments from the U.S. impending recession, which have brought about a string of panic not only in North America’s but also in Europe’s financial markets, then creating this growing threat to asset values and liquidity (as in the case of a reputable investment bank having to be bailed out of its liquidity crunch leading to its eventual sell-off), and then bringing these to bear in our local financial markets, and while several financial institutions are presently encountering an unexpected steep fall in sales — ah, this tiny bit of news, about ordinary Filipinos establishing their mark in the global arena, is most welcome, something quite different, a breath of fresh air, indeed, must I say, against the murk of panic and depression.

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Bear Stearns at 2.4% of Book Value

Could this be how bad the recession in the US is right now?

Bear Stearns Cos., one of the largest global investment banks and securities trading and and brokerage firms in the world, entered into a deal to sell its business to JP Morgan Chase & Co., another investment banking company, for 236 million dollars or equivalent to $2 per share, which translates to only around 2.4% of its book value.

Bloomberg and other business news magazines and websites are all over the issue.

To illustrate how bad this deal is, the deal was sealed last Sunday (March 16, 2008) at $2, Bear Stearns stock last Friday (March 14) was trading at $30, more than $60 last week, and more than $150 last year. Moreover, the Company reported a book value of $84.09 in the fourth quarter of 2007.

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CIA Exam November 2007

The official results of the November 2007 Certified Internal Auditor (CIA) Exams for Philippines candidates are out, although the news are not yet included in the News and Events section of the IIA Philippines website as of this post. Results are also available for CFSA (Certified Financial Services Auditor) and CCSA (Certification for Control Self-Assessment) examinations.

PDF Icon The Gold Medal Award (Top 1), two of the Certificate of Excellence awards (Top 5), and nine of the Certificate of Honor awards (Top 25) were garnered by Filipinos. This means that aside from the Top 1, 40% of the Top 5 and 36% of the Top 25 were Filipinos!

Click PDF icon to download the results in PDF format.

Now that’s what you call Filipino excellence!

Ex-Deloitte Philippines Information Hub

The Ex-Deloitte Philippines Information Hub is officially launched. No cutting of ribbons, really. Just putting up the website online.

The site was designed to cater to the former C.L. Manabat & Co. (Deloitte – Philippines) professionals, wherever side of the world they currently are, as a common online hang out. A community where former officemates may meet and greet each other, discuss in forums and topics of common interests, and reminisce the moments we shared during our long or even short stints in the firm.

So, calling all ex-CLMC employees to register and sign-up now for a new account. I look forward to meeting you there.