Higher Christmas pay for workers sought anew

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Monday, December 9, 2013

SENATOR Ralph Recto has filed again a bill that that would raise the tax exemption ceiling on Christmas bonuses and 13th month pay to give the public and private employees more spending power during the holiday season.

Under Senate Bill 256, Recto wants the exclusion hiked to P75,000 from the current P30,000, which was set by the National Internal Revenue Code (Republic Act 7833) nearly 20 years ago.

He said the law was passed in 1994 when the basic wage of government employees was only P2,800 and the salary of the President of the Philippines was only P25,000.

At present, the basic pay of the lowest-ranking government worker is P9,000 while the salary grade of the Chief Executive is P120,000.

"We owe it to the people to amend laws that tend to be more repressive rather than be beneficial to the people. In this bill, we intend to breathe life again to the spirit of the law that, during the time of its passage, intended to allow the people to enjoy more of their hard-earned money," said Recto, who filed the same measure but with a lower tax cap of P60,000 in the 15th Congress.

Recto said the National Tax Research Center (NTRC) and National Economic and Development Authority (Neda) peg the exemption ceiling estimates as of 2011 at P72,000 and P75,000, respectively, if adjustments for inflation were reckoned from 1994.

The bill proposes the adjustment of the P75,000-ceiling using the Consumer Price Index (CPI) as published by the National Statistics Office (NSO) three years after the measure’s enactment and every three years thereafter.

Bureau of Internal Revenue (BIR) Commissioner Kim Henares declined to comment on the bill, deferring the matter to the Department of Finance (DOF). Finance Secretary Cesar Purisima, who supervises BIR, has not responded to a text query. (Sunnex)

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