Congress eyes bigger tax exemption for bonuses – Drilon

Senate President Franklin Drilon. INQUIRER FILE PHOTO

MANILA, Philippines – Congress is likely to pass a bill increasing the amount of 13^th-month pay that would be exempted from income tax to P75,000 from P30,000 at present, Senate President Franklin Drilon said Tuesday.

Senate Bill No. 256, authored by Senate President Pro Tempore Ralph Recto, was on the legislative agenda taken up by Drilon, Speaker Feliciano Belmonte and other congressional leaders two weeks ago.

Drilon made the announcement of congressional support for Recto’s bill despite opposition from the Bureau of Internal Revenue, which warned that up to P43 billion in revenues would be lost if the measure is passed.

Drilon and Recto are both members of President Benigno Aquino III’s Liberal Party.

Drilon said senators and House members were aware of the need to review old provisions of the law “to provide relief to state and private workers whose purchasing power has been shrinking for years due to inflation, but still have had to deal with the consequences of an outdated law.”

“The law was passed 20 years ago, and obviously, things have greatly changed,” Drilon said in a statement.

Drilon was referring to Republic Act No. 7833 that set the P30,000 cap on tax-exempt bonuses in 1994 when the lowest monthly basic salary for government employees was P2,800, while the President of the Philippines received P25,000 per month.

That figure is “no longer reflective of current economic realities, thus making it even more difficult for the average Filipino worker to make both ends meet for him and his family,” Drilon said.

Drilon said the basic salary of government employees is now pegged at P9,000, with the highest salary reaching P120,000 per month.

“While most of the priority bills right now focus on macroeconomic progress, we have to make sure that necessary bills such as SBN 256 will also receive the required resources and attention towards their passage, for the sake of our countrymen,” Drilon said. “Our country’s laws must always prioritize the improvement of the living standards of its citizenry. Bills like this are necessary to address the real-time concerns and immediate demands of our people.”

Drilon said Recto’s SBN 256 “is one of the most prominent pro-consumer legislation which will receive urgent legislative attention due to its direct effect to millions of Filipino workers around the country.”

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