Congress to prioritize bill raising tax exemption cap on 13th-month pay

Despite objection from the Bureau of Internal Revenue (BIR), Congress will prioritize the passage of the bill raising the tax exemption cap on 13th-month pay, Christmas bonus and other work benefits.

 

In a statement, Senate President Franklin Drilon said Congress leaders agreed to give "urgent legislative attention" to the measure that seeks to raise the tax exclusion limit on 13th-month pay and other bonuses from the current P30,000 to P75,000.

 

Republic Act 7833, signed in 1994, specifies the current tax exemption cap on bonuses. 

 

"The law was passed 20 years ago, and obviously, things have greatly changed, making such figures no longer reflective of current economic realities, this making it even more difficult for the average Filipino worker to make both ends meet for him and his family," Drilon said.

 

He added that Congress leaders, who met earlier this month, decided to revisit the law on tax exemption cap "to provide relief to state and private workers whose purchasing power has been shrinking for years due to inflation."

 

In a Senate hearing last December, BIR chief Kim Henares opposed the bill raising the tax exemption cap for bonuses, saying that it may mean P43 billion in revenue losses for the Philippine government.

Henares added that the legislature should be willing to pass new tax measures if it is bent on approving the bill raising the tax exemption cap.

 

The Senate leadership has not yet identified any new tax measure as among its priorities this Congress. Last year, the legislature passed the Sin Tax Reform Law, which brought the government P33.96 billion in additional revenues. — Andreo Calonzo/RSJ, GMA News