BIR Ruling

August 12, 1975 Mr. Fortunato Santiago President Negros Occidental ABC Negros Occidental S i r : This refers to your telegram dated March 12, 1975 to the President of the Philippines, in behalf of the Barangay Leader of Negros Occidental and Provincial Federation of Barangay Council, requesting the increase of personal exemptions to P6,000.00 for heads of the families and to P2,000.00 for every dependent child for income tax purposes which was referred to this Office for appropriate action. acd 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 filers, only about 600 thousand are filing taxable returns. Any increase in exemptions 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 exemptions would be 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 increased 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. Very truly yours, CONRADO P. DIAZ Acting Commissioner