PNoy signs into law higher tax exemption ceiling on bonuses and 13th month pay

By XIAN ARCANGEL, GMA News

Published February 12, 2015 5:00pm

(Updated 6:35 p.m.) President Benigno Aquino III has signed into law the measure raising the tax exemption ceiling on bonuses to P82,000 from P30,000, a House leader said Thursday.

House Ways and Means committee chair Marikina City Rep. Romero Quimbo lauded Aquino for signing the bill, which is expected to benefit the middle class, especially the salary and the wage earners.

“The President saw the significance of the measure as it is projected to benefit taxpayers from low to middle incomes who have not had any reprieve from the burdensome taxes imposed on their earnings,” Quimbo said in a statement.

“These are the salary and wage earners who long deserve a break from the inequitable tax system that we currently have,” he added.

In Malacañang, Communications Secretary Herminio Coloma Jr. confirmed this on Thursday, citing information from the Office of the Executive Secretary.

Quimbo actively pushed for the bill’s passage in the House last year as part of efforts to reform the tax system. It was ratified by both the House of Representatives and the Senate last December.

500,000 employees

The measure was transmitted to Aquino for his signature on Jan. 14. The President signed it two days before Feb. 14. when it was supposed to lapse into law.

The benefits of the new legislation are expected to be felt as early as June 2015, when the first half of the 13th month pay is usually received by employees.

At least half a million employees, both from the government and private sectors, are expected to benefit from the new legislation.

With the measure signed into law, Quimbo said Congress is now setting its sights on passing a comprehensive tax reform measure that is envisioned to simplify the tax structure, adjust the brackets to inflation and reduce tax rates.

The House Ways and Means committee is now in the process of completing the substitute bill on income tax reforms, which is likely to be approved on second reading before Congress goes on recess on March 20, 2015.

Senate Pro Tempore Ralph Recto, an author of the bill, earlier said the Department of Finance asked the Senate to delay the passage of the measure until 2015 so that the administration can reach its target collection for 2014.

Despite strong opposition

Senator Juan Edgardo Angara expressed his gratitude to Aquino for signing into law the measure seeking to amend Republic Act 7833 which set the tax exemption ceiling at P30,000 way back in 1994.

"I congratulate both houses of Congress and the President for working together in granting our Filipino workers this long overdue tax relief and letting them benefit more from their hard-earned money. Belated Christmas present man, perfect Valentines gift pa rin para sa ating mga kababayan," said Angara, chairman of the Senate ways and means committee and one of the authors of the bill.

The newly enacted law has provided for the automatic adjustment of the ceiling every three years, taking into account inflation, to ensure that the tax ceiling won't be left unchanged again for more than two decades.

"Again, I thank the President for signing our bill despite strong opposition from the Finance Department. It's a wonderful indication that the government is open to amending our outdated tax system and making it more fair and equitable to all our taxpayers,” he said.

He expressed hope the government would be one with the goal of not overtaxing the what Filipino taxpayers has earned for himself and his family. – With reports from Amita Legaspi and Andreo Calonzo/VS, GMA News

Tags: taxexemptioncap, taxexemptionceilingbill