BIR Ruling

July 17, 1975 The Municipal Secretary Dingalan, Aurora Sub Province Quezon S i r : This refers to Resolution No. 19 of the Municipal Board, Dingalan, Sub Province of Aurora, Quezon, requesting the President of the Philippines, this Office, and the Secretary of Finance, to increase the personal exemptions of P6,000.00 for head of the family and P2,000.00 for every dependent child. cdti In reply, I have the honor to inform you that while the clamour for increased personal and additional exemptions seems to find merit in the light of increasing cost of living, nevertheless, this office is not inclined to recommend for the present any increase in the amount of statutory exemptions in view of the following reasons: 1. Out of over 4 million income tax return filers, only about 600 thousand are filing taxable returns. Any increase in exemption will further erode the tax base. 2. The income tax is a direct tax. By paying it, the taxpayer establishes his link with the government, and he can rightfully say that he assumes his proper share of the tax burden as a bona fide stockholder of the New Society. To increase the amount of exemption would go to reduce the number of direct supporters of the government, a result that is not conducive to the promotion of discipline, nationalism and love of country. 3. To give in to the clamour for increase exemptions would set back by decades our tax consciousness campaign, whose main thrust has been to inculcate in the minds of taxpayers the value and significance of taxes to the economy, and the importance of maximum voluntary compliance by taxpayers with their tax obligations. aisa dc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5