CONGRESS APPROVES P82K TAX EXEMPTION CAP OF 13TH MONTH PAY, BONUSES
Millions of Filipino workers in offices and factories will take home the full amount of their “13th month pay and other benefits” as both chambers of Congress formally agreed to set the tax exempt ceiling at P82,000.
The House of Representatives adopted Senate Bill 2437 as its own version of the proposal. In a 14-0 vote, the Senators approved on third and final reading the bill raising the tax cap for the 13th-month pay and other benefits from P30,000 to P82,000.
House Committee on Ways and Means Vice Chairman Sharon S. Garin supports the move of her fellow lawmakers to adopt the senate version.
Bureau of Internal Revenue Commissioner Kim Henares said in one of the senate hearings that P30,000 in 1994 would be worth around P82,000 today; hence, the basis of the senate version raising the tax exemption.
“Teachers, factory workers, call center agents, and other wage earners should be given time-off from tax burdens at the end of the year. Less deduction from the take-home pay of employees would boost their purchasing power which would translate to economic growth,” said Rep. Garin.
Only President Benigno Simeon Aquino III’s signature is needed before employees and workers can benefit from the tax exemption.
Once signed into a law, the Department of Finance and the Bureau of Internal Revenue will craft the implementing rules and regulations.
Rep. Garin thinks that the tax drain from the tax exemption will be compensated by increases in corporate income tax, VAT and indirect taxes because consumers will spend more. /MP