Senate panel approves bill raising tax ceiling on bonuses, 13th month pay 

The Senate ways and means committee on Wednesday approved a proposed legislation exempting from payments below P75,000 from their 13th month pay and bonuses.

 

Senate President Pro-Tempore Ralph Recto endorsed for plenary debates Committee Report No. 84 or Senate Bill No. 2437, which consolidated five bills. 

 

The new measure seeks to exempt from taxes up to P75,000 in bonuses and 13th month pay.

 

The current ceiling on bonuses and 13th month pay is P30,000. 

 

In his privilege speech, Recto said the government stands to lose P2.6 billion to P5.6 billion in tax collections once the measure is passed into law .

 

"Whatever is the revenue loss for the government is actually income gained for the workingman. And even if his 13th month pay is tax exempt upon receipt, it will be taxable when spent, so tax not withheld at source will...  be captured in the form of sales tax at points of sale," the senator explained.

 

Recto hoped to pass the measure before the years ends so tax payers may enjoy the new law before the holiday season.

 

"There's something else we can do to ease the plight of our consumers, and perhaps add a little cheer to their Christmas, and that is to pass the law… This bill can be our Christmas card to them," he added. 

 

A similar measure filed at House of Representatives has been approved in the committee level. – Rouchelle R. Dinglasan/VS, GMA News