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Additional tax exemptions for individual taxpayers sought

Posted On 2014 Jan 16
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Bureau of Internal Revenue Commissioner Kim S. Jacinto-Henarez advises the camp of boxing icon and Sarangani Rep. Emmanuel “Manny” Pacquiao to talk with the BIR to know all the problems on the garnishment order against his bank accounts during a press conference at the Department of Justice on Thursday (Nov. 28, 2013). Flanking her are BIR Deputy Commissioner Estela V. Sales (left) and Atty. Albert Opon. (MNS photo)

Bureau of Internal Revenue Commissioner Kim S. Jacinto-Henarez advises the camp of boxing icon and Sarangani Rep. Emmanuel “Manny” Pacquiao to talk with the BIR to know all the problems on the garnishment order against his bank accounts during a press conference at the Department of Justice on Thursday (Nov. 28, 2013). Flanking her are BIR Deputy Commissioner Estela V. Sales (left) and Atty. Albert Opon. (MNS photo)

MANILA  (Mabuhay) — Lawmakers are now considering a measure that would ease the financial burden of individual taxpayers through possible additional tax exemptions.

HB 2660, authored by Rep. Diosdado Macapagal Arroyo (2nd District, Camarines Sur) and Rep. Gloria Macapagal-Arroyo (2nd District, Pampanga), seeks to grant additional exemption to individual taxpayers by amending Section 35 (B) of the National Internal Revenue Code of 1997, as amended by R.A. No. 9504.

“We really hope that the additional exemptions proposed under the bill will be a welcome respite for the unheralded working class who provides the much-needed revenues for the government,” the Arroyos said.

The salient provisions to ease the financial woes of the working class include the following:

1) Removing the limitation on the number of allowable dependents and including an additional exemption for those who have dependents with disability;2) Including legitimated children and parent/s in the definition of dependents;3) Allowing a legal guardian to a person with mental and physical disability to claim additional exemption;4) Allowing an additional exemption of P50,000.00 for each dependent child with disability regardless of age; and5) Allowing an additional exemption of P50,000.00 for each dependent parent with disability.

Under HB 2660, Section 35(B) shall now read: “Additional Exemption for Dependents. – There shall be allowed an individual exemption of Twenty Five Thousand Pesos (P25,000.00) for each dependent without disability and Fifty Thousand Pesos (P50,000.00) for each dependent with disability.”

However, as has been before, the additional exemption for dependents referred to by the measure shall be claimed by only one of the spouses in case of married individuals.

Also, in case of legally separated spouses, additional exemption may be claimed only by the spouse who has custody of the child or children.

Another new provision states: “An individual taxpayer who is the legal guardian or a disabled person may claim the additional exemption for the said dependent: Provided, that only the legal guardian can avail of the additional exemption for a particular taxable year to the exclusion of the biological parents.”

HB 2660, the term dependent refers to “a legitimate, legitimated, illegitimate or legally adopted child chiefly dependent upon and living with the taxpayer if such dependent is not more than 21-years old, unmarried and not gainfully employed or if such dependent, regardless of age, is incapable of self-support because of mental or physical disability.”

Likewise, a dependent is “a parent or both parents, living with the taxpayer, not gainfully employed and dependent upon the latter for chief support, or where such parent are incapable of self-support because of mental or physical disability or old age.”

On the other hand, the term disabled person refers to “a person suffering from restriction or different abilities as a result of mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.”

However, HB 2660 provides that “notwithstanding the penalty provided for in Section 267 of the National Internal Revenue Code of 1997, as amended, any person who wilfully violates the preceding section by declaring fictitious dependents shall, upon conviction, be liable for the payment of a fine equivalent to thrice the amount of tax, interest and surcharges due from the taxpayer.”(MNS)

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