WAGE EARNERS TO SOON FEEL IMPACT OF TAX-EXEMPT BONUS CEILING OF P82, 000

WAGE EARNERS TO SOON FEEL IMPACT OF TAX-EXEMPT BONUS CEILING OF P82, 000

Low to middle income employees who will get to take home the full amount of their “13th month pay and bonuses” now that Bureau of Internal Revenue issued the implementing guidelines of the law raising the tax exempt ceiling to P82, 000.

The BIR issued Revenue Regulations 03-2015 last March 9, 2015.

Since the law is now in effect “Teachers, call center agents, and other wage earners will enjoy bigger bonuses as early as June this year when some companies release one half of the 13th month pay,” said Rep. Sharon S. Garin, Vice-chair of the House Committee on Ways and Means and one of the key proponents of the measure.

 President Benigno Simeon Aquino III, in February, signed Republic Act 10653 that revised Section 32 (B) of the National Internal Revenue Code of 1997 raising the tax cap for the 13th month pay and other benefits from P30, 000 to P82, 000.

The bill was enacted despite strong resistance from the Bureau of Internal Revenue Commissioner Kim Henares who said that government will lose up to P30 billion in revenues and only six (6) percent of employees or 1.5 million workers will benefit as a result of the higher tax exemption for 13th month pay and bonuses

Henares, however, admitted in one of the senate hearings that P30, 000 in 1994 would be worth around P82, 000 today; hence, the basis of the measure raising the tax exemption cap.

Rep. Garin, a taxation lawyer and a certified public accountant, 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