Despite the P22 across-the-board wage increase, minimum wage earners in the National Capital Region (NCR) will still be exempted from paying income tax, an official of the Department of Labor and Employment said Tuesday, adding that the increase in monthly salary of workers in the private sector and government office will be implemented on July 1.
Avito Santo Tomas, the department’s assistant regional director for NCR, clarified reports that said minimum wage earners would be pushed to pay income tax because of the P22 across-the-board wage increase ordered by the Regional Tripartite Wages and Productivity Board on Monday.
“The minimum wage ordered in 2008 precisely exempts minimum wage earners from paying income tax,” Santo Tomas said, adding that the increase in wage does not cover overtime pay and night differential for those working from 10 p.m. to 6 a.m.
He explained also that increasing the monthly minimum wage of workers in NCR to P404 from P382 would not affect the tax exemption because the decision of the board and the Labor department, together with representatives from labor and management, to boost the monthly salary of minimum wage earners will merely “restore” the purchasing power the workers enjoyed during the last wage increase in 2008.
On Monday, the wage board, after a three-week deliberation, granted the P22-wage hike of the minimum wage earners in Metro Manila after nearly two years without a new wage order. This, however, was much lower than the P75 across-the-board wage hike earlier petitioned by the Trade Union Congress of the Philippines (TUCP).
The TUCP is set to appeal the P22-increase order after the wage board publishes the new wage order.
The last wage hike in 2008 added P18.49 to the salary of minimum wage earners in Metro Manila. Last year, the board also decided to exempt minimum salary receivers from paying income tax.
Santo Tomas said that the wage hike will be effective on July 1, 15 days after the publication of the wage order on June 16.
NCR’s minimum wage earners in nonagricultural sectors are expected to receive P404 monthly salaries from the original P382 while those in the agricultural sectors will be receiving P367 monthly from their previous P345.
The wage hike does not include the cost of living allowance since the P22-increase will be added to the basic wage received by minimum wage earners monthly. –Bernice Camille V. Bauzon, Manila Times
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