Higher tax exemption cap on bonuses now a law
MANILA, Philippines – President Benigno Aquino III has signed into law the measure raising the ceiling for tax exemption on bonuses and other benefits of workers in the public and private sectors, an administration lawmaker said Thursday.
In a statement, Ways and Means committee chair Marikina Rep. Miro Quimbo lauded the President’s passage of the bill, saying the measure would benefit the middle class salary earners.
“The President saw the significance of the measure as it is projected to benefit taxpayers from low to middle incomes who have not had any reprieve from the burdensome taxes imposed on their earnings,” Quimbo said.
“These are the salary and wage earners who long deserve a break from the inequitable tax system that we currently have,” he added.
Communications Secretary Herminio Coloma Jr. confirmed the news.
“According to the Office of the Executive Secretary, the President has signed into law the bill raising the ceiling on tax exemptions on bonuses to P82,000. The signed law will be transmitted to Congress shortly,” he told Palace reporters on Thursday.
The law increases the tax exemption cap from P30,000 to P82,000, amending for this purpose Section 32(B)(7)(E) of the National Internal Revenue Code of 1997.
The tax exemption covers all bonuses, including 13th month pay and Christmas bonus.
Aquino received his copy of the bill on January 14 after both Houses of Congress ratified the bill December last year. It would have become a law on February 14 if it does not get the President’s signature, when the 30 calendar day-period lapses.
Quimbo said salary earners would feel the impact of the bill as early as June this year, when some workers will receive the first half of their 13th month bonuses.
Finance and tax officials have called for the President’s veto of the bill, warning of revenue loss reaching up to P30 billion. But Quimbo has said losses would only amount to P3.8 billion. With a report from Kristine Angeli Sabillo