Gatchalian pushes for tax deductions to offset work-from-home setup cost

Senator Sherwin Gatchalian is proposing to reduce employees’ taxes for work done under a work-from-home (WFH) setup to ease their financial burden.

In a statement on Saturday, Gatchalian said benefits in the form of allowable tax deductions could help ease the burden of telecommuting employees such as a reduction of P25.00 from their taxable income for every hour of work under WFH arrangement, which will lessen the taxes they have to pay and in effect increase their net pay.

Also, allowances or other benefits not exceeding P2,000 per month granted to them by their employers can be legislated as a non-taxable benefit, the senator said.

Gatchalian is the vice-chairperson of the Senate Economic Affairs Committee.

The lawmaker’s proposals are contained under Senate Bill No. 1706 or the Tax Incentives for Individuals on a Work-From-Home or Telecommuting Program co-authored by Gatchalian.

The measure also includes a provision allowing employers to claim an additional 50% income tax deduction for allowances granted within the specified ceiling.

Such a provision, Gatchalian said, seeks to encourage employers to provide much-needed allowances to their employees by allowing them to deduct an additional 50% of the amounts they provide for income tax purposes.

“In providing for these allowable tax deductions, it will effectively increase the workers’ take-home pay and somehow, these would suffice to cover part of their electricity, internet connectivity fees and other work-related expenses. The amount will be substantial especially for cash-strapped individuals,” he explained.

“Mahalaga ang pagbibigay ng insentibo lalo na sa maraming mga empleyado na hanggang ngayon ay nag-a-adjust pa rin sa ‘new normal.’ Malaking tulong na ito sa kanilang buwanang gastusin, pampalubag loob din ito sa mga nakakaramdam ng stress habang naka work-from-home.”

(It is important to give incentives, especially now that many employees are still adjusting for the "new normal." This will be a great help for them to ease their monthly expenses and ease their stress while under the WFH setup.)

Emphasizing the need for such incentives, Gatchalian cited a recent survey by Microsoft called the First Annual Work Trend Index, conducted among 31,092 full-time employed or self-employed workers across 31 global markets including the Philippines, which shows that 42% of employees said that even after a year of working from home, they still lack essential office supplies and one in 10 don’t have an adequate internet connection to do their job.

Meanwhile, 46% said their employer did not help with remote work expenses.

While employees keep up with today’s fast-paced digital world, the same survey says 63% of workers in the Philippines said they feel overworked while 31% said they feel exhausted, according to the senator.

Another survey conducted by JobStreet.com Philippines said some 10 months ago showed that 75% of the respondents claimed that they did not receive any reimbursement or allowance for their electricity and internet expenses from their companies and 87% said employers should shoulder their WFH costs while 38% claimed they experienced a reduction in their income due to poor internet service. — DVM, GMA News