Senate OKs P82K tax cap for 13th-month pay
Senate Hall. FILE PHOTO
MANILA, Philippines— In a 14-0 vote, the Senate approved Wednesday 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.
According to Senator Juan Edgardo “Sonny” Angara, co-author and sponsor of Senate Bill 2437, employees receiving 13th-month pay and other benefits, including Christmas bonuses and productivity bonuses, not exceeding P82,000 will be exempted from tax once the bill becomes a law and is enacted.
The original tax exemption proposal was fixed at P75, 000 but was later raised to P82, 000 upon the suggestion of Senator Ralph Recto during the plenary deliberations.
Angara did not object to Recto’s proposal citing the same figure given by internal Revenue Commissioner Kim Henares during one of the hearings.
“She (Henares) said that P30,000 in 1994 would be worth around P82,000 today,” Angara said.
Article continues after this advertisementHe noted that the P30,000 tax ceiling had not been adjusted in 20 years.
Article continues after this advertisementHe said he had included a provision “that the adjustment be made mandatorily every three years to coincide with major surveys conducted by the Philippine Statistics Authority such as the Family and Income Expenditure Survey.”
Senate President Franklin Drilon agreed with the hike, saying that the bill’s passage is necessary “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purchasing power has been shrinking for years due to inflation, but still have had to deal with the consequences of an outdated law.”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 tax exemption, however, would not be implemented this year because of time constraints.
“This is because it is up to the Department of Finance and the Bureau of Internal Revenue to come up with the implementing rules and regulations when this law is passed, and they may not have enough time to accomplish that in time. But surely, the law will be fully implemented next year,” the Senate leader noted.
RELATED STORIES
