APPLE wins lawsuit against SAMSUNG a whopping $1.05B for Patent infringement

This is no shocking news for us, as it was in the beginning that most experts viewed SAMSUNG as the underdog in the case (APPLE is miles away from the courthouse and jurors were pick up in the heart of silicon valley). How awesome APPLE achieved alot of success by copying and building the graphical user interface by XEROX yet have been so litigious with other companies. I don't begrudge them protecting their intellectual property but how in the world were they granted patented for curved edge on a rectangular phone? The part about patenting a shape in my idea is ridiculous. But i also personally believed that SAMSUNG is liable on other legal grounds, APPLE's touch screen innovation with icons is simple yet revolutionary as evidenced by a fact that everyone copied the idea. I believed fine will be reduced on appeal.

I am not rooting for SAMSUNG, as I do love my iPhone more than any SAMSUNG gadgets. What I care is, american court verdict will not be viewed as a win for APPLE but a clear loss for us end consumers. I have come to hate APPLE, as the company that snuffs out any competition, although this is understandable on the business sense and shareholder's value, but these kinds of maneuvers will ultimately limit consumer choice and eliminate free enterprise. AN additional bucks for us customer's for the so called PATENT BURDEN.

On the other side, the case is also a strategy for APPLE to road block the fast facing Google's ANDROID OS and stem the tide of market share that ANDROID is collectively gaining.

There's quite a chunk that is not fair to APPLE and they could dredge up things against SAMSUNG or others or vice versa, but doesn't mean they'd be in court for years, battle after battle. Maybe it's best for us consumers if technology company like SAMSUNG and APPLE to focus on spending their money research and development rather than spewing on litigation.

On the bright side, it is expected for SAMSUNG to back at the drawing board and make major overhauls. A major reset could produce exciting products and innovations and hopefully at a friendlier price.

APPLE wins lawsuit against SAMSUNG a whopping $1.05B for Patent infringement

Introduction to Bookkeeping: Accounting for Non-Accountants

This crash course on bookkeeping is specially address to those who don't have bookkeeping or accounting background. Hope this article will make a little help to those who want to understand the language of business. Hope you find a need to address more the technicalities of the topic don't hesitate to ask the blog owner by submitting your comments.

INTRODUCTION TO BOOKKEEPING
Why Learn Bookkeeping ?
Why would you want to learn bookkeeping and keep up to date financial records anyway ? Can't you hire an accountant to come after the end of the year and get your check book and shoe box and do your taxes ? Sure you can ! And yes you will have adequately fulfilled your taxpayer obligations. But in order to run a business and know what, where, and when to take corrective actions requires business information. How do you get and where do you find this information ? You don't if you don't keep accurate and current records about your business financial activities (bookkeeping).
Before we go into the structure of the language, we will try to see which problems are answered by bookkeeping.

1. The problem of human memory - In a commercial business, even in the smallest business, hundreds and thousands of transactions are carried out over a year. It is obvious that without proper records, it would be difficult for you to reconstruct past transactions relying on your memory alone.
2. Determining the annual profit - Determining the precise annual profit is of the utmost importance, both to you as the owner of the business and to the Tax Authorities (Income Tax, V.a.t. and Social Security). Bookkeeping is in fact the raw material used as a basis for determining the profit.
3. Current Control - By means of up-to-date bookkeeping, it is possible to obtain current data in real time. Thus for example, you are able to use bookkeeping to obtain answers to questions of the sort: 'What is the cash balance?' 'What is the balance at the bank?' 'What credit is available to any particular supplier?', and more.
4. Business analysis - It is reasonable to assume that you will ask yourself how to increase the profits of the business. Is it possible to reduce any particular class of expense and so on It is obvious that the main tool to assist you in an analysis of this type, is the bookkeeping system.

Accounting is the art of analyzing, recording, summarizing, reporting, reviewing, and interpreting financial information.

Bookkeeping is the process of recording and classifying business financial transactions (activities). In simple language-maintaining the records of the financial activities of a business or an individual. Bookkeeping's objective is simply to record and summarize financial transactions into a usable form that provides financial information about a business or an individual.


Bookkeeping Conventions/Concepts

Accrual Concept
Supports the idea that income should be measured at the time major efforts or accomplishments occur rather than when cash is received or paid.

Revenue Realization Concept
The revenue recognition principle requires companies to record revenue when it is realized or realizable and actually earned. In other words, at the time the goods are actually sold or the services are rendered.

Accounting Period Concept
This assumption assumes that business operations can be recorded and separated into different time periods such as months, quarters, and years. This is required in order to provide timely information that is used to compare present and past performance.

Money Measurement Concept
This assumption assumes accounting measures transactions and events in money and only transactions that can be monetized (stated in a monetary unit such as peso) recorded and presented in the financial statements.

Business Entity Concept
This assumption requires every business to be accounted for separately from the owner.

Cost Concept
This principle requires that most assets are recorded at their original acquisition cost and except for a relatively few exceptions (marketable securities) no adjustment is made for increases in market value.

The Bookkeeping Language

Assets
An asset is something the business own or the right to receive something in the future.

Liabilities
A liability is where the business owe something to someone.

Owner's Equity also called Owner's Capital
The owner's rights to the property (assets) of the business; also called proprietorship and net worth.

Revenue also called Income
Amounts a business earns by selling services and products. Amounts billed to customers for services and/or products.

Expense also called Cost
The costs of doing business. The stuff we used and had to pay for or charge to run our business.

Types of Assets
Cash-Monetary items that are available to meet current obligations of the business. It includes bank deposits, currency & coins, checks, money orders, and traveler's checks.

Accounts Receivable-Business claims against the property of a customer arising from the sale of goods and/or services on account.

Notes Receivable-Formal written promises given by customers or others to pay definite sums of money to the business at specified times.
Inventory-Expenditures for items held for resale in the normal course of a business's operations.

Office Supplies-Expenditures for maintaining a supply of on hand supplies such as typewriter, copier, and computer paper, pens, pencils, and special forms.

Land-Expenditures for parcels of the earth. It includes building sites, yards, and parking areas.

Buildings-Expenditures for structures erected on land and used for the conduct of business.

Equipment-Expenditures for physical goods used in a business, such as machinery or furniture. Equipment is used in a business during the production of income.

Furniture includes items needed in a business office such as tables, desks, chairs, and cabinets.

Types Of Liabilities

Accounts Payable-Creditor's claims against the business's property arising from the business's purchase of goods and/or services on account.

Notes Payable-Formal written promises to pay definite sums of money owed at specified times.

Mortgage Payable-Notes payable which are secured by a lien on land, buildings, equipment, or other property of the borrower (your business).

Types of Revenue (Income)
Sale of Products-Amounts earned from the sale of merchandise.
Sale Of Services-Amounts earned from performing services.
Rental Income-Amounts earned from renting properties.
Interest Income-Amounts earned from investments.

Types of Expenses
Supplies-Expenditures for incidental materials needed in the conduct of business, such as office supplies.
Salaries-Expenditures for work performed by employees.
Payroll Taxes-Expenditures for taxes based on wages paid to employees.
Advertising-Promotional expenditures, such as newspapers, handbills, television, radio and mail.
Utilities-Expenditures for basic services needed to function in the modern world, such as water, sewer, gas, electricity and telephone. Most businesses track the amount spent for each type of utility service.
Building Rental-Expenditures paid to an owner of property (building) for use of the property. A rental agreement called a lease contains the terms.
Maintenance & Repairs-Expenditures paid to repair and or maintain buildings and/or equipment.

Double Entry System
The double entry system is the standard system used by businesses and other organizations to record financial transactions. Since all business transactions consist of an exchange of one thing for another, double entry bookkeeping using debits and credits, is used to show this two-fold effect. Debits and credits are the device that provide the ability to record the entries twice and are explained in more detail later in this tutorial.

The double entry system also has built-in checks and balances. Due to the use of debits and credits, the double-entry system is self-balancing. The total of the debit values recorded must equal the total of the credit values recorded.
It got its name because each transaction is recorded in at least two places (accounts) using debits and credits.

Debits and Credits

Debit
An entry (amount) entered on the left side (column) of a journal or general ledger account that increases an asset, draw or an expense or an entry that decreases a liability, owner's equity (capital) or revenue.

Credit
An entry (amount) entered on the right side (column) of a journal or general ledger account that increases a liability, owner's equity (capital) or revenue, or an entry that decreases an asset, draw, or an expense.
For Every Debit There Is A Credit

Debit and Credit Equation
Assets + Draws + Expenses = Liabilities + Owner's Equity + Revenue
Normal Debit Balance Accounts = Normal Credit Balance Accounts

Recording Business Transactions
The following are summary of transactions taken from the books of ABC Bookkeeping Services.
1. Alberto B. Cruz, owner of ABC Bookkeeping Services invests P5,000 cash to the business. Analysis: Asset account increases and owner’s equity increases.
Dr. Cash 5,000
Cr. A. Cruz, Capital 5,000
2. ABC purchase P300 worth of office supplies. The office supply store gives them an invoice that allows them to pay in 15 days (on account). Analysis: The expense account supplies increases and the payable account increases.
Dr. Supplies Expense 300
Cr. Accounts Payable 300
3. ABC renders bookkeeping services and receives a check from customer for, P3,000 for the service provided. Analysis: The asset account cash increases and owner’s equity increases.
Dr. Cash 3,000
Cr. Service Income 3,000

4. ABC places an ad in the local newspaper amounting to P1,500, receives the invoice from the supplier allowing them to pay in 20 days. Analysis: Expense increases and claims to the business (liability) increases.
Dr. Advertising Expense 1,500
Cr. Accounts Payable 1,500
5. ABC purchases office equipment for P10,000 and finances them with a note from a local bank. Analysis: Office Equipment account increases and the creditor’s claim (liability) increases also.
Dr. Office Equipment 10,000
Cr. Notes Payable 10,000
6. ABC renders bookkeeping services to another client for P5,000 and sends the customer a bill (invoice) for the service they performed. They allow their customer 10 days to pay them for this service (on account). Analysis: Receivables or claims to the customer increases and owner’s equity increases.
Dr. Accounts Receivable 5,000
Cr. Service Income 5,000
7. The owner of ABC needs a little money to pay some personal bills and writes himself a check for P,1000. Analysis: Cash decreases and owner’s claim to the business decreases.
Dr. A. Cruz, Capital 1,000
Cr. Cash 1,000
8. ABC pays the office supply company P300 for the office supplies that they charged. Analysis: The cash account decreases and creditor’s claim (liability) decreases.
Dr. Accounts Payable 300
Cr. Cash 300
9. ABC receives a check from the customer who they billed (invoiced) P5,000 for services. Analysis: The asset account cash increases while the amount owed by customers decreases.
Dr. Cash 5,000
Cr. Accounts Receivable 5,000


10. ABC pays utilities for the period amounting to P3,400. Analysis: Expense increases and cash account decreases.
Dr. Utilities Expense 3,400
Cr. Cash 3,400
11. ABC renders services to customer and allow them to pay for 10 days. Transactions amounts to P4,000. Analysis: Receivables increases and income also increases.
Dr. Accounts Receivable 4,000
Cr. Service Income 4,000

The T-Accounts
T-Accounts are used as a tool to illustrate business transactions, debits and credits, double entry bookkeeping, and the purpose of accounts. It is called this because it has the form of the letter T. On the top of the horizontal bar there is the account title (name). Increases and Decreases are placed on the side of the vertical bar depending on whether the account type is an asset, liability or equity account. The left side of the T-account is called Debit, and the right side is called Credit. These terms are often abbreviated as Dr. and Cr.

The General Ledger and Journals
A General Ledger is just a book containing the summarized financial transactions and balances of the accounts for all of a business's assets, liabilities, equity, revenue, and expense accounts.

Journals are preliminary records where business transactions are first entered into the accounting system. The journal is commonly referred to as the book of original entry. Specialized Journals-are journals used to initially record special types of transactions such as sales, cash disbursements, and cash receipts in their own journal.






The Trial Balance
Account Name Debit Trans. Credit Trans. Debit Bal. Credit Bal.
Cash 13,000.00 4,700.00 8,300.00
Accounts Rec. 9.000.00 5,000.00 4,000.00
Office Eqpt. 10,000.00 10,000.00
Accts. Payable 300.00 1,800.00 1,500.00
Notes Payable 10,000.00 10,000.00
A. Cruz. Cap 1,000.00 5,000.00 4,000.00
Service Income 12,000.00 12,000.00
Supplies Expense 300.00 300.00
Advertising Exp 1,500.00 1,500.00
Utilities Exp 3,400.00 3,400.00
Total 38,500.00 38,500.00 27,500.00 27,500.00




THE FINANCIAL STATEMENTS
Financial Statements are summary accounting reports prepared periodically to inform the owner, creditors, and other interested parties as to the financial condition and operating results of the business. The basic financial statements are:
Balance Sheet-The financial statement which shows the amount and nature of business assets, liabilities, and owner's equity as of a specific point in time. It is also known as a Statement Of Financial Position or a Statement Of Financial Condition.




ABC Bookkeeping Services
Balance Sheet
As of December 31, 20XX

Assets
Cash P8,300.00
Accounts Receivable 4,000.00
Office Equipment 10,000.00
Total Assets P 22,300.00

Liabilities
Accounts Payable P1,500.00
Notes Payable 10,000.00
Total Liabilities P11,500.00

Owner’s Equity
A. Cruz, Capital Beg. 5,000.00
Add: Net Income 6,800.00
Total 11,800.00
Less: A. Cruz, Withdrawal 1,000.00
A. Cruz, Capital End 10,800.00

Total Liabilities and Owner’s Equity P 22,300.00

Income Statement-The financial statement that summarizes revenues and expenses for a specific period of time, usually a month or a year. This statement is also called a Profit and Loss Statement or an Operating Statement.


ABC Bookkeeping Services
Income Statement
For the period Ended, December 31, 20XX

Service Income P12,000.00
Less: Expenses

Supplies Expense P 300.00
Advertising Expense 1,500.00
Utilities Expense 3,400.00 5,200.00
Net Income P6,800.00

Introduction to Bookkeeping: Accounting for Non-Accountants

RA 9505 - Personal Equity and Retirement Account (PERA) Act of 2008

[REPUBLIC ACT No. 9505]
AN ACT ESTABLISHING A PROVIDENT PERSONAL SAVINGS PLAN, KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA)
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
SECTION I. Title. – This Act shall be known as the “Personal Equity and Retirement Account (PERA) Act of 2008”.
SEC.2. Declaration of Policy. – It is declared the policy of the State to promote capital market development and savings mobilization by establishing a legal and regulatory framework of retirement plans for persons, comprised of voluntary personal savings and investments. The State recognizes the potential contribution of PERA to long-term fiscal sustainability through the, provision of long-term financing and reduction of social pension benefits.
SEC.3. Definition of Terms. -Unless the context requires otherwise, the following terms shall have the following significance as used in this Act:
(a) “Administrator” is an entity accredited by the Bureau of Internal Revenue (BIR), after pre qualification by the concerned Regulatory Authority. The Administrator shall be responsible for overseeing the PERA, whose core functions shall include, but not limited to: reporting on contributions made to the account, computing the values of investments, educating the Contributor, enforcing PERA contributions and withdrawal limits, collecting appropriate taxes and penalties for the government, securing BIR Income Tax Credit Certificates for the Contributor, consolidating reports on all investments, income, expenses and withdrawals on the account and ensuring that PERA contributions are invested in accordance with the prudential guidelines set by the Regulatory Authorities.
(b) “Contributor” is any person with the capacity to contract and possesses a tax identification number. The Contributor establishes and makes contributions to a PERA.
(c) “Custodian” is a separate and distinct entity unrelated to the Administrator, accredited by the Bangko Sentral ng Pilipinas, providing services in connection with the custodianship of funds and securities comprising the PERA investments. The Custodian shall be responsible for receiving all funds in connection with the PERA, maintaining custody of all original securities, evidence of deposits or other evidence of investment. The Custodian shall operate independently from the Administrator. The Custodian is required to report to the Contributor and the concerned Regulatory Authority at regular intervals all financial transactions and all documents in its custody under a PERA.
(d) “Early withdrawal” shall pertain to any withdrawal prior to the period of distribution as set forth under Section 12 hereof.
(e) “Investment Manager” is a regulated person or entity authorized by a Contributor to make investment decisions for his PERA. As such, it shall assume fiduciary duty and responsibility for PERA investments. An Investment Manager shall act with utmost fidelity by observing policies directed towards confidentiality, scrupulous care, safety and prudent management of PERA funds.
(f) “Personal Equity and Retirement Account (PERA)” refers to the voluntary retirement account established by and for the exclusive use and benefit of the Contributor for the purpose of being invested solely in PERA investment products in the Philippines. The Contributor shall retain the ownership, whether legal or beneficial, of funds placed therein, including all earnings of such funds.
(g) “PERA Investment Product” refers to a unit investment bust fund, mutual fund, annuity contract, insurance pension products, pre-need pension plan, shares of stock and other securities listed and traded in a local exchange, exchange-traded bonds or any other investment product or outlet which the concerned Regulatory Authority may allow for PERA purposes: Provided, however, That to qualify as a PERA investment product under this Act, the product must be non-speculative, readily marketable, and with a track record of regular income payments to investors. The concerned Regulatory Authority must first approve the product before being granted tax-exempt privileges by the BIR.
(h) “Regulatory Authority” refers to the Bangko Sentral ng Pilipinas (BSP) as regards banks, other supervised financial institutions and trust entities, the Securities and Exchange Commission (SEC) for investment companies, investment houses stockbrokerages and pre-need plan companies, and the Office of the Insurance Commission (OIC) for insurance companies.
(i) “Oveseas Filipino” refers to (1) an individual citizen of the Philippines who is working or deriving income from abroad, including one who retained or reacquired his Philippine citizenship under Republic Act No. 9225, otherwise known as the “Citizenship Retention and Reacquisition Act of 2003”; or (2) the legitimate spouse, whether or not said spouse is of Filipino ancestry, and the children of the Filipino citizen mentioned in item (1) hereof.
SEC. 4. Establishment of a PERA. – A Contributor may create and maintain a maximum of five (5) PERA, at any one time: Provided, That the Contributor shall designate and maintain only one (1) Administrator for all his PERA. The Contributor shall make all investment decisions pertaining to his PERA. However, he has the option of appointing an Investment Manager, either in writing or in electronic form, to make investment decisions on his behalf without prior consultation.
SEC.5. Maximum Annual PERA Contributions. – A Contributor may make an aggregate maximum contribution of One hundred thousand pesos (P l00,000.00) or its equivalent in any convertible foreign currency at the prevailing rate at the time of the actual contribution, to his her PERA per year: Provided, That if the Contributor is married, each of the spouses shall be entitled to make a maximum contribution of One hundred thousand pesos (P l00,000.00) or its equivalent in any convertible foreign currency per year to his her respective PERA: Provided, further, That if the Contributor is an overseas Filipino, he shall be allowed to make maximum contributions double the allowable maximum amount. A Contributor has the option to contribute more than the maximum amount prescribed herein: Provided, That the excess shall no longer be entitled to a tax credit of five percent (5%). The Secretary of Finance may adjust the maximum contribution from time to time, taking into consideration the present value of the said maximum contribution using the Consumer Price Index as published by the National Statistics Office, fiscal position of the government and other pertinent factors.
SEC.6. Employer’s Contribution. – A private employer may contribute to its employee’s PERA to the extent of the amount allowable to the Contributor: Provided, however: That the employer complies with the mandatory Social Security System (SSS) contribution and retirement pay under the Labor Code of the Philippines. Such contribution shall be allowed as a deduction from the employer’s gross income. The Contributor, however, retains the prerogative to make investment decisions pertaining to his PERA.
SEC.7. Separate Asset. -The PERA shall be kept separate from the other assets of an Administrator/Custodian and shall not be part of the general assets of the Administrator/Custodian for purposes of insolvency.
SEC.8. Tax Treatment of Contributions. – The Contributor shall be given an income tax credit equivalent to five percent (5%) of the total PERA contribution: Provided, however: That in no instance can there be any refund of the said tax credit arising from the PERA contributions. If the Contributor is an overseas Filipino, he shall be entitled to claim tax credit from any tax payable to the national government under the National Internal Revenue Code of 1997, as amended.
SEC.9. Tax Treatment of Investment Income. – All income earned from the investments and reinvestments of the maximum amount allowed herein is tax exempt.
SEC.10. Tax Treatment of Distributions. – All distributions in accordance with Section 12 hereof are tax exempt.
SEC.11. Termination. -Any premature termination shall be treated as an early withdrawal under Section 13 hereof: Provided, That the penalties thereunder shall not apply if the entire proceeds there from are immediately transferred to another PERA investment and/or another Administrator.
SEC.12. Distributions Upon Retirement/Death. - Distributions may be made upon reaching the age of fifty-five (55) years: Provided, That the Contributor has made contributions to the PERA for at least five (5) years. The distribution shall be made in either lump sum or pension for a definite period or lifetime pension, the choice of which shall be at the option of the Contributor. The Contributor, however, has the option to continue the PERA. Complete distribution shall be made upon the death of the Contributor, irrespective of the age of the Contributor at the time of his death.
SEC.13. Penalty on Early Withdrawal. – Any early withdrawal shall be subject to a penalty, the amount of which would be determined by the Secretary of Finance and payable to the government: Provided, That the amount of the penalty shall in no case be less than the tax incentives enjoyed by the Contributor.
No early withdrawal penalty shall be imposed on any withdrawal of any funds for the following purposes:
(a) For payment of accident or illness-related hospitalization in excess of thirty (30) days; and
(b) For payment to a Contributor who has been subsequently rendered permanently totally disabled as defined under the Employees Compensation Law, Social Security Law and Government Service Insurance System Law.
SEC.14. Non-Assignability. – No portion of the assets of a PERA may be assigned, alienated, pledged, encumbered, attached, garnished, seized or levied upon. PERA assets shall not be considered assets of the Contributor for purposes of insolvency and estate taxes.
SEC.15. Rules and Regulations. – Consistent with the policy of promoting transparency in PERA investment and thereby affording protection to the Contributor, the Department of Finance, the Bureau of Internal Revenue and the concerned Regulatory Authorities, with the Bangko Sentral ng Pilipinas as lead agency, shall coordinate to establish uniform rules and regulations pertaining to the following subject matters:
(a) Qualification and disqualification standards for Administrators, Custodians and Investment Managers, including directors and officers thereof;
(b) Qualified and/or eligible PERA investment products;
(c) Valuation standards for PERA investments;
(d) Disclosure requirements on the terms and conditions of the PERA investments;
(e) Minimum requirements imposed on the Administrators as regards inculcating financial literacy in investors;
(f) Ascertainment of client suitability for PERA products;
(g) Fees to be charged by the Administrator, Custodian or Investment Manager shall always be reasonable and approved by the concerned Regulatory Authority;
(h) Record-keeping, reporting and audit requirement of Administrators and Custodians pertaining to records for all contributions, earnings and total account balances; and
(i) Other pertinent matters to be determined by the Regulatory Authorities.
SEC.16. Administration of Tax Incentives. – The BIR shall issue the implementing rules and regulations regarding all aspects of tax administration relating to PERA. The BIR shall coordinate the qualification standards of the Administrator with the Regulatory Authorities.
SEC.17. Penalty. - A fine of not less than Fifty thousand pesos (P 50,000.00) nor more than Two hundred thousand pesos (P 200,000.00) or imprisonment of not less than six (6) years and one (1) day to not more than twelve (12) years or both such fine and imprisonment, at the discretion of the court, shall be imposed upon any person, association, partnership or corporation, its officer, employee or agent, who, acting alone or in connivance with others, shall:
(a) Act as Administrator, Custodian or Investment Manager without being properly qualified or without being granted prior accreditation by the concerned Regulatory Authority;
(b) Invest the contribution without written or electronically authenticated authority from the Contributor, or invest the contribution in contravention of the instructions of the Contributor;
(c) Knowingly and willfully make any statement in any application, report, or document required to be filed under this Act, which statement is false or misleading with respect to any material fact:
(d) Misappropriate or convert, to the prejudice of the Contributor, contributions to and investments or income from the PERA;
(e) By gross negligence, cause any loss, conversion, or misappropriation of the contributions to, or investments from, the PERA or
(f) Violate any provision of this Act or rules and regulations issued pursuant to this Act. Notwithstanding the foregoing, any willful violation by the accredited Administrator, Custodian or Investment Manager of any of the provisions of this Act, or its implementing rules and regulations, or other terms and conditions of the authority to act as Administrator, Custodian or Investment Manager may be subject to the administrative sanctions provided for in applicable laws. The above penalties shall be without prejudice to whatever civil and criminal liability provided for under applicable laws for the same act or omission.
SEC.18. Abuse of the Tax Exemption and Privileges. - Any person, natural or juridical, who unduly avails of the tax exemption privileges herein granted, possibly by co-mingling PERA accounts in an investment with other investments, when such person is not entitled hereto, shall be subject to the penalties provided in Section 17 hereof. In addition, the offender shall refund to the government double the amount of the tax exemptions and privileges enjoyed under this Act, plus interest of twelve percent (12%) per year from the date of enjoyment of the tax exemptions and privileges to the date of actual payment.
SEC.19. Separability Clause. - If any provision or part hereof is held invalid or unconstitutional, the remainder of the law or the provision not otherwise affected shall remain valid and subsisting.
SEC.20. Repealing Clause. – All laws, decrees, orders, rules and regulations or parts thereof inconsistent with this Act are hereby amended or modified accordingly.
SEC.21. Effectivity. -This Act shall take effect fifteen (15) days following its publication in a newspaper of general circulation: Provided, That the tax incentives granted hereunder shall take effect on January 1, 2009.
This Act which is a consolidation of Senate Bill No. 1882 and House Bill No. 3764 was finally passed by the Senate and the House of Representatives on June 10, 2008.
Approved: August 22, 2008

RA 9505 - Personal Equity and Retirement Account (PERA) Act of 2008

Tax Exemptions for Minimum Wage Earners (RA 9504)

President Gloria Macapagal-Arroyo signed in Malacañang on tuesday Republic Act 9504 or an act amending sections 22, 24, 34, 35, 51, and 79 ofRA 8424 or the National Internal Revenue Code of 1997, an act exempting minimum wage earners from paying income tax and increasing personal exemptions for other employees.


The law aims to provide financial relief to taxpayers in cognizance by the government of the hard times brought by multiple factors, including the current rice crisis, oil price hikes and the heighteninginflationary pressure on commodities of all kinds and to help reduce the wide tax gap in the taxation of self-employed and professionals.

Apart from the tax exemptions for the minimum wage earners, the law will also provide for an increase in the personal exemptions of all taxpayers. The tax exemption will be fixed at P50,000 from the current P20,0000 personal exemptions for single taxpayers, P25,000 for head of the family and P32,000 for married individual.

In additon, additional exemptions for dependents will increase from P8,000 to P25,000. All holiday, night differential, hasard and overtime pay would also be tax exempt.

The government is expected to billions of pesos with the new law and hopes to recover from the impsotion of Optional Standard Deduction for professionals and medium, small and micro entrepreneurs.

The law will take effect 15 days after its publication in a national newspaper.

For computational concerns please do contact me and i'll show you the tax savings of the new law from your previous tax obligations.

Tax Exemptions for Minimum Wage Earners (RA 9504)