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Home » Post Item » The Problem with RA 9504
The Problem with RA 9504
June 24, 2008Have you heard of Republic Act No. 9504? I was making cash advance computations the other day when it occurred to me how this new ruling would complicate my life. For one, it’s supposedly effective 15 days after publication in papers of major circulation. When we called up BIR and DOLE, however, we were told to wait for official word from the tax guys before implementing the new round of deductions.
The problem with waiting is that no one knows when BIR would give the go-signal for the implementation. It could be July or November. By then, taxpayers the whole archipelago over would have paid monthly taxes that do not reflect the revised exemptions. This poses a huge problem to people whose job it is to pore over your payroll because by year-end, you would have overpaid several thousands in taxes.
Of course, there’s always the option of asking BIR for a tax refund, but who knows when you’ll actually get it? A site visitor, Gerry Barcelona, pointed out employees get their refunds from their employers, and employers in turn, can claim their refunds from the BIR. Well and good, I say.
The thing that gets my goat, though, is that thus far, there have been no clear guidelines for the computations. From the BIR site a few days back, we got a’hold of Draft Regulations bearing the subject: Implementing Pertinent Provisions of Republic Act No. 9504, “An Act Amending Sections 22, 24, 34, 35, and 79 of Republic Act No. 8424, as amended otherwise known as The National Internal Revenue Code” Relative to the Withholding of Income Tax on Compensation and Other Concerns. This document indicated that for 2008, companies must have two tax tables: Jan - June and July - December. I’m not sure if the regulations and computations there would be fully carried out, but just so you know, this and this are how the adjusting computations are shaping out to be.
The full BIR link: http://209.85.141.104/search?q=cache:PQ1Nww0agzoJ:ftp://ftp.bir.gov.ph/webadmin1/pdf/41197RR%25202008EXEMPTION-2.pdf+RA+9504+implementing&hl=tl&ct=clnk&cd=8&gl=ph
Previous Comments
Hi Gerry, thanks for dropping by.
Yes, you’re right. The employer refunds employees, and in turn, the employer gets its refund from BIR. Thanks for the future free consult. =)
Posted by nevergirl at June 30, 2008, 4:36 pmHi nevergirl, just drop by to say thanks for info., Can you upload the Revised TaxTable for July-December 2008
Sol Peñales
Payroll Officer
Hi Nevergir,
The new law takes effect July 6 - no retroactive coverage, emphasized by the BIR. Anyhow, can you please upload the implementing provisions/Tax Table? They are not yet available in any government site.
Thanks,
Ara
Posted by ara salazar at July 2, 2008, 2:07 pmWith annualization required every year end, it’s best to used the annualized method of withholding taxes. Read the rules and it seems that the year was divided into 2 tax periods apportioning income earned and the exemptions as well. The annualized method takes out the need to use tax tables and can withholding taxes can be adjusted accordingly every month. Am currently revising the withholding tax modules in a lot of my payroll systems with the new law. Tried out new rules and its workable. Also awaiting finalized rules to complete module modifications.
Posted by douglas at July 7, 2008, 11:38 amI prepared a primer on RA 9504. Anyone interested to get a copy, email me. djr@pal-onl.com
Posted by Rante J. Ramos at August 7, 2008, 12:47 pmi’ve heard that there will be two alphalist that you have to submit, jan to jun and july to dec. how is that? If you will annualize jan to jun separately and jul to dec, the result will be lesser tax but if you combine it, the tax bracket will increase thereby increase of tax too. any comment? thanks.
Posted by marix at August 13, 2008, 9:46 amthere’s actually a legal basis (SC case, Umali vs. Estanislao) for making the tax exemptions take effect for the entire 2008, esp considering that this law is a social legislation. also, there are issues in the way that the BIR has defined a minimum wage earner, not to mention the various reportorial and administrative requirements being imposed by the BIR. prof orgs, led by the Tax Mgt Assoc of the Phils (TMAP), will come out with a joint statement regarding this position, which we hope could overturn the draft regulations submitted by the BIR to the DOF. i’ll post the joint statement as soon as its out. hope you could support us, esp since this will provide immediate and direct relief to all workers. thanks.
Posted by smartee at August 20, 2008, 5:35 pmHi did you by any chance get to download a copy of the implementing rules for RA 9504.
i couldn’t access the link you gave.
thanks.
Posted by celia at August 22, 2008, 3:34 pmHi guys, i have here the JOINT STATEMENT ON
THE IMPLEMENTATION OF THE TAX RELIEF PACKAGE LAW-Atty. Laura Victoria Yuson-Layug
President, Tax Management Association of the Phils. (TMAP)
September 1, 2008
- is this another case of misdirection from our government? pls adviced
hello, just dropped by and saw your comments.
i was also concerned about the effectivity of the said ammended law-RA 9504, i wouls like also to have a copy of the law to fully understand the ammendments. i hav tried on the link you’ve given but i, too couldn’t access the page,.
hi everyone,
go to www.bir.gov.ph it’s already posted there. IRR: 10 2008
Hello guys, do you think I am not being protected by this Law?
I have a blog about it.
Please find your way here:
http://diskorner.blogspot.com/2009/08/living-with-crocs.html
Posted by Diskorner at October 20, 2009, 2:08 pm
hi, i just came across your views on republic act 9504. just to answer your question when to receive your wtax refund, you refund it from your employer since he is the withholding tax agent, by january the following year you should have received it, and your employer in turn will collect from the bir on your behalf, your employer should know about this. i know this because im an accountant in public practice, should they need to consult me they may reach me at 9209215886
Posted by gerry at June 30, 2008, 11:06 am