Congress approves bill limiting tax on employees’ bonus

By , on September 4, 2014

(Malacanang stock photo)
(Malacanang stock photo)

MANILA — The Committee on Ways and Means of the House of Representatives yesterday approved a measure increasing the tax exemption ceiling for the 13th month pay, Christmas bonus, and other benefits of employees.

Employees with benefits not exceeding P70,000 a year will be exempt from tax collection done by the Bureau of Internal Revenue.

“We approved the tax exemption because pag dating ng Pasko, mayoon silang (come Christmas time, they will have) enough funds to be able to celebrate the occasion….,” Marikina Rep. Miro QuimboQuimbo said in an inteview after the committee approval.

The lawmaker also added that given the rate of inflation and the rising cost of living,the current P30,000 tax exemption ceiling as is no longer enough to support the country’s workers,

“So we need to adjust that to inflation.. Ang na-approve natin today ay exempting all bonuses or 13th month pay to the extent of P70,000, so more than double yung tax exemption na nangyayari,” Quimbo said.

House Bill 3670, also seeks to increase the tax exemption threshold every three years. This is in order to promote the general welfare of the country’s workers.

Consolidated under this bill, by Iloilo Rep. Jerry Trenas, were HB 248, filed by ACT party-list Rep. Antonio Tinio; HB 589, Rep. Jose Christopher Belmonte; HB 2835, Makati Rep. Mar-Len Abigail Binay; HB 3245, Aurora Rep. Bellaflor Angara Castillo; HB 3409, Reps Anthony Bravo and Crescente Paez; HB 3459, Bayan Muna party-list Reps. Carlos Zarate and Neri Colmenares; and HB 3629, Rep. Raneo Abu.

“With the unabated rise of food, housing, education, electricity, water, and transportation expenses, the 13th-month pay and other benefits are no longer mere “bonuses” as these are necessities relied upon by our countrymen as sources of income to support their families,” Trenas said.