Govt expands tax exemptions on de minimis benefits

Benefits under collective bargaining agreements (CBAs) and productivity incentive schemes will be exempted from income tax on compensation beginning January 2015 after President Benigno Aquino III approved a measure expanding the list of de minimis benefits.

According to a Department of Labor and Employment statement, the government expanded the list of de minimis (minor) benefits to be exempted from income tax on compensation, to include benefits under CBAs and productivity incentive schemes.

"Madaragdagan ng P10,000 ang tax exemptions ng mga benepisyong tinatanggap ng mga manggagawang Pilipino," said Presidential Communications Secretary Herminio Coloma Jr. at briefing over state-run dzRB on Sunday.

"Bunsod ito ng pag-apruba ni Pangulong Aquino sa bagong patakaran hinggil sa karagdagang tax exemptions sa mga benepisyong ipinagkaloob sa mga manggagawa sa ilalim ng mga collective bargaining agreement at productivity incentive schemes," he said.

The total amount of de minimis benefits each taxpayer can claim will reach up to P104,225 from P94,225, DOLE said.

The new measure will take effect in January next year through a revenue regulation that will be issued by the Bureau of Internal Revenue (BIR).

However, the government expects P16.9 billion in revenues to be foregone.

"This measure directly impacts the working poor and the smallest income earners, who stand to have the most to gain from these benefits," Finance Secretary Cesar Purisima was quoted as saying in a DOLE statement.

Labor Secretary Rosalinda Dimapilis-Baldoz said the expansion of the list of de minimis benefits was among the demands of labor at the dialogue with President Aquino during the observance of Labor Day last May.

The BIR revenue regulation on de minimis benefits was last amended in 2012. —Kathryn Mae P. Tubadeza/LBG, GMA News