House panel OKs bill imposing high exemption ceiling on bonuses-A A +A
Wednesday, September 3, 2014
THE House committee on ways and means approved Wednesday a bill seeking to raise the exemption ceiling on 13th month pay and other bonuses to P70,000 from P30,000.
Marikina City Representative Romero Quimbo, committee chairperson, said House Bill 4829 would cover the 13th month pay, Christmas bonus, and other bonuses of public and private employees.
Quimbo said the tax exemption ceiling has remained unchanged since it implementation in 1997.
"Tax brackets remain unadjusted since 1997... So we need to adjust that [13th month] to the inflation. We adopted the very same parameters and values when they allowed the P30,000 [exemption] in 1997… P30,000 [exemption] in 1997 is more than P70,000 already today," said Quimbo.
He said the bill would improve the purchasing power of workers.
"In reality nowadays, the P30,000 exemption is only P14,000 and we have to help our workers enjoy their benefits," Quimbo added.
While the proposal would result in lost revenues amounting to around P1.5 billion a year, Quimbo said the proposal would help generate P550-million in new revenues as workers are expected to purchase and avail of more goods and services.
"Masyado namang exaggerated ang P3 billion ni BIR (Bureau of Internal Revenue) Commissioner (Kim) Henares. Mga P1.5 billion lamang ang lost revenues and we can at least generate 38 percent recovery or P550 million in return because the people will pay taxes for purchasing goods and availing of services," Quimbo said.
The proposed measure seeks to amend Section 32 of the National Internal Revenue Code.
"This is good for the economy and the Senate agreed also to pass the measure," he said.
Iloilo Representative Jerry Treñas, a co-author of the bill, said the P30,000 ceiling is low given the rate of inflation and the rising cost of living.
"With the unabated rise of food, housing, education, electricity, water and transportation expenses, the 13 month pay and other benefits are no longer mere "bonuses", as these are necessities relied upon by our countrymen as sources of income to support their families," he said.
Treñas added that the country's best taxpayers are the employees who have no choice but to pay their monthly taxes through the withholding tax system of our country.
"Yet they are the ones who are most burdened by the government for even their 13 month pay and other benefits are only exempt from taxes for only up to a certain extent," the lawmaker said.
"This legislative action is necessary to enable employees to have more of their income to take home for their families," ACT Teachers party-list Representative Antonio Tinio, the bill's co-author, said.
"Even without considering the unrestrained inflation in prices of basic commodities and services, salary increases are hardly felt by employees in the public and private sectors," he added.
Meanwhile, Quimbo said despite objection from the BIR, Congress would prioritize the passage of the bill. Lawmakers are rushing to pass the bill before the coming holiday season.
"We will pass it into a law within the year... So the implementation will be in 2015," he said.
Earlier, BIR Commissioner Kim Henares, in a news report, said the government will lose P43 billion if the bill raising the tax exemption cap for 13th month pay and other bonuses is approved.
Henares said Congress should be willing to pass new tax measures if it is bent on approving the bill, which will benefit the country's workers. (Sunnex)