4.2 - Minimum Wages and Taxes Concerns of Filipino Entrepreneurs

Minimum Wage

- Minimum amount of compensation that an employer is required to pay its workers for work performed within a particular time

- Intended to protect employees from unreasonably small wages

National Wages and Productivity Commission

- advise the President and Congress on salaries, profits, and growth. Decide by province and sector the minimum wage rates applicable

Wage Rationalization Act

- States that there should be different minimum wage rates per region

RA 6727

- republic act number for the wage rationalization act

Migration to Urban Areas

- High minimum wage rates in urban areas can create an influx of job seekers from neighboring cities who are seeking opportunities to have a higher paying job

Fewer Businesses in Other Areas

- A higher minimum wage rate attracts not only job seekers but also business owners

- Big Businesses would rather be located in a big city where many people are working and earning than be in other regional municipalities with fewer people due to a higher purchasing power

Taxes

- Compulsory charges by the government to fund its different operations

- Levied on individuals, companies, and the goods people consume

Documentary Stamp Tax

- Tax on papers, instruments, loan agreements, and documentation showing the approval, assignment, settlement, or change of a contract or right

Donor’s Tax

- Tax on a donation or gift and is imposed on the free transfer of property between two or more persons living at the time of the transfer

Estate Tax

- Tax on the right of a deceased person to transfer their estate at the time of death to their rightful heirs and recipients

Income Tax

- Tax on personal income

- Usually levied to employees and entities and is based on respective profit or income

Comprehensive Tax Reform Program

- Revision towards a faster, fairer, and more effective taxation system

- Seeks to increase revenues to support the government’s programs and finance investments

RA 10963

- republic act number for the comprehensive tax reform program

Tax Reform for Acceleration and Inclusion

- other term for the comprehensive tax reform program