BIR Ruling [DA-433-00]

December 18, 2000 BIR RULING [DA-433-00] Senate Tax Study and Research Office Room 524, 5/F Senate of the Philippines GSIS Financial Center Roxas Blvd., Pasay City Attention: Ms . Nilda D . Vasquez Director-General Gentlemen : This refers to your letter dated July 13, 2000 requesting for this Office's comments position paper on Senate Bill No. 2068 introduced by Senator Juan Ponce Enrile. DSIaAE Significant feature of SB No . 2068 The bill proposes to amend Sec. 35(A) and (B) of the 1997 Tax Code by increasing the allowable personal and additional exemptions of individual taxpayers, to wit: Current under Proposed under Sec. 35(A) & (B) Senate Bill 2068 Single P20,000.00 P48,000.00 Head of the Family 25,000.00 54,000.00 Married 32,000.00 64,000.00 Additional exemption for 8,000.00 16,000.00 dependents not exceeding four (4) Our comments/position . Considering the drastic deterioration of the value of our Peso, the proposed increase is indeed a tax break for the individual taxpayers especially the fixed income earners who depend solely on their compensation for their daily subsistence. The purpose of the bill is indeed laudable and the proponent deserves our support. This Office, however, is constrained to interpose its objection. mainly, because the net effect of the proposed increase ranging from one hundred percent (100%) to one hundred forty percent (140%) personal or additional exemption, as the case may be, depending on the status of the taxpayer, will definitely reduce the expected contribution of individual taxpayers by approximately forty-five percent (45%). This will greatly affect the proposed budget amounting to P725 Billion for the year 2001. Having this in view, this Office interposes objection to the passage of this proposed bill. As regards-statistics on the number of individual taxpayers, by gross income and by tax status, i.e., single, head of the family. and married by number of dependents, please find enclosed data as requested. Very truly yours, (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal & Inspection Group