House panel OKs proposed 25% income tax discount for COVID-19 medical frontliners

The House Committee on Ways and Means on Monday approved in principle the consolidated measure seeking to provide a 25% discount to the personal income taxes of COVID-19 medical frontliners.

During its meeting, the panel approved the unnumbered substitute bill consolidating House Bills 7351, 984, 2901, 3751, 7523, and 7978, which all sought to provide various forms of incentives to medical professionals providing services amid the COVID-19 pandemic.

House panel chair Joey Salceda said the committee agreed to approve the measure “because we do not want to tax the hazard pays and other allowances earned by the frontliners from COVID-19.”

“The 25% discount will likely cover the taxes they would have owed on their COVID-19 allowances. That was the state’s attempt to compensate them for their service. Let me be clear: I do not want the government to tax their heroism,” he added.

House Bill 7351 initially sought to exempt from taxation for 2020 medical and non-medical frontliners who are directly serving, treating, caring, aiding and assisting COVID-19 patients.

However, the Department of Finance pointed out that doing so would entail a revenue loss of P9 billion.

The tax panel's senior vice chair, Nueva Ecija Representative Estrellita Suansing, then suggested the 25% discount as a compromise.

Under the proposal, the exemption covers the salary or compensation, as well as the gross receipts from the exercise of profession or employment received by a frontliner for taxable year 2020. 

This exemption, however, does not cover income received by medical frontliners from businesses, investments and other kinds of passive income not related to serving COVID-19 patients.

At the same time, the measure allows the Secretary of Finance to extend the filing of income tax from medical frontliners by six months so that they can file their taxes on time. —KG, GMA News