Signing into law of higher tax exemption cap on bonuses a ‘perfect Valentine’s gift’
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MANILA, Philippines — A “perfect Valentine’s gift,” was how Senator Sonny Angara described President Benigno Aquino III’s signing into law of a measure that would raise the take-home pay of Filipino workers by increasing the tax exemption cap on 13th month pay and other benefits.
“I congratulate both houses of Congress and the President for working together in granting our Filipino workers this long overdue tax relief and letting them benefit more from their hard-earned money,” the senator said in a statement Thursday.
“Belated Christmas present man, perfect Valentine’s gift pa rin para sa ating mga kababayan,” said Angara, chair of the Senate ways and means committee and one of the authors of the measure.
With the signing of the law, the 13th month pay and other benefits, including productivity incentives and Christmas bonuses, not exceeding P82,000 given to both government and private sector employees will be exempted from tax. This sought to amend Republic Act 7833 which set the tax exemption ceiling at P30,000 way back in 1994.
Angara pointed out that the newly enacted law has provided for “the automatic adjustment of the ceiling every three years, taking into account inflation, to ensure that the tax ceiling won’t be left unchanged again for more than two decades.”
Article continues after this advertisement“Again, I thank the President for signing our bill despite strong opposition from the Finance Department. It’s a wonderful indication that the government is open to amending our outdated tax system and making it more fair and equitable to all our taxpayers,” he said.
Article continues after this advertisement“I hope our government would be one with our goal of not overtaxing what Juan Dela Cruz has earned for himself and his family,” added Angara, who also filed a bill that seeks to lower individual income tax rates and adjust the brackets across-the-board.
Senate Pro Tempore Ralph Recto also thanked the President for signing the measure into law.
“The law is meant to provide economic relief to workers both private and public, whose purchasing power has been substantially eroded due to inflation because RA 7883, which is the original law granting the benefit, took effect 20 years ago and has never been adjusted,” said Recto, principal author of the measure, in a separate statement.
“The measure will increase the disposable income of workers which will not only allow them to celebrate a merrier Christmas but also pay for tuition, medical attention and other basic necessities. This supports a stronger, hardworking and productive middle class who are the country’s engine of growth,” he added.
The passage of the law, Recto said, only proved that the government “is concerned with the people’s welfare and is one with their aspirations for a better life.”
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