Friday July 20, 2018

Bicam committee: Up to P340-K annual pay tax-free

Members of the bicameral conference committee on the Tax Reform for Acceleration and Inclusion (Train) bill agreed on Wednesday, December 6, to raise the tax-exempt cap for the 13th-month pay and other bonuses to P90,000.

The committee also agreed to exempt the P250,000 annual taxable income of all individual income taxpayers.

“Kung susumahin, aabot na sa P340,000 na kita kada taon ang hindi na pwedeng galawin ng gobyerno. Buong-buo na itong maiuuwi ng ating mga taxpayer sa kanilang mga pamilya (Government can no longer tax up to P340,000 annual income),” Senator Juan Edgardo Angara, chairman of the Senate ways and means committee, said in a statement.

Under Republic Act 10653, the 13th-month pay and other benefits, including productivity incentives and Christmas bonuses, are exempted from tax if these do not exceed P82,000.

The Senate version of the Train retained the P82,000 tax-free cap while the approved version of the House of Representatives raised the cap to P100,000.

As a compromise, members of the bicameral committee, who are tasked to reconcile the differences between the two versions, have agreed to raise the tax-exempt ceiling to P90,000 effective 2018.

The 13th-month pay, which is equivalent to the monthly basic salary of an employee, is to be given to private sector employees before December 24.

Under the law, rank-and-file employees are entitled to a 13th-month pay regardless of the nature of their employment and whatever the method their wages are paid, provided they worked for at least one month during a calendar year. (PS Jun Sarmiento / SunStar Philippines)