Rice, clothing allowance exempt from income tax - BIR

MANILA, Philippines- As salaries of regular wage earners shrink because of the effects of surging inflation, the government's tax agency on Friday clarified that benefits of employees including rice and clothing or uniform allowances are exempt from income and fringe benefit taxes. In a statement, Bureau of Internal Revenue Commissioner Lilian Hefti said that according to newly issued Revenue Regulation 5 - 2008 a worker's rice allowance worth not more than P1,500 and uniform or clothing allowances not over P4,000 a month are exempted from income tax on compensation as well as from fringe benefit tax. The regulation stated that “de minimis" benefits that are exempted from the fringe benefit tax shall should be limited to facilities or privileges furnished or offered by an employer to his employees that are of relatively small value and are offered or furnished by the employer merely as a means of promoting the health, goodwill, contentment, or efficiency of his employees. The benefits stated in the provision would apply to income earned starting this year. The government is implementing non-wage benefits to appease workers who are seeking a P125 across-the-board wage increase due to rising oil and food prices in the world market. - GMANews.TV