THE bigger Christmas bonuses of salaried employees, including government personnel, are now at risk owing to the delay in the passage of the first tax reform package in the Senate.
The Senate should just put in whatever modifications they want and pass the tax reform bill. After all, President Duterte has certified the measure.
Once the Senate approves the bill, we can leave it all up to the bicameral conference committee to thresh out the final version of the measure for ratification.
Besides slashing individual income tax rates and freeing all personal income up to P250,000 from taxes, the bill also increases from P82,000 to P100,000 the maximum amount of tax-exempt 13th month pay and other bonuses that may be received by employees every year.
The personal income tax cuts will put an extra P141 billion in the paychecks of salaried employees as a result of reduced withholding taxes.
The House passed House Bill (HB) 5636, or the proposed Tax Reform for Acceleration and Inclusion Act, on third and final reading on May 31, and promptly sent the measure to the Senate.
However, an apparently strong lobby by the sugar and beverage industries against the proposed P10-per-liter tax on sweetened drinks has held up the passage of the bill in the Senate.
Finance Secretary Carlos Dominguez III earlier warned that he might ask the President to veto any watered-down version of HB 5636 approved by the Senate.
Still, Dominguez expressed readiness to forego the tax on sugared drinks, as long as the Senate approves the original version of the administration’s tax reform package, as contained in a bill authored by Senate President Aquilino Pimentel III.
Pimentel’s Senate Bill (SB) 1408 slaps a P6-per-liter excise tax on petroleum products all at once, while HB 5636 spreads out the application of the tax in phases over three years.
HB 5636 is anticipated to raise P134 billion in net revenues on its first year, to include P87 billion from new excise taxes on petroleum and automobiles plus P81 billion from the removal of several value-added tax exemptions, among others.--Buhay Rep. Lito Atienza