The Department of Labor and Employment (DOLE), in partnership with SM Malls conduct nationwide jobs fair in celebration of Labor Day (May 1). Over 310,000 jobs are offered to qualified applicants. Photo shows applicants line up at Mall Event Center of SM Manila. (MNS photo)
MANILA (Mabuhay) – The ways and means committee of the House of Representatives on Wednesday approved the bill increasing the tax exemption ceiling for workers’ bonuses to P70,000.
The tax exemption would cover the 13th month pay, Christmas bonus, and other bonuses received by employees yearly.
The current ceiling for the tax exemption of P30,000 was set by law in 1994.
Marikina Representative Romero Federico Quimbo, chairman of the committee, said a report would be immediately drafted so that the measure could be reported and tackled in plenary, noting that the bill was among the priorities in the House.
“We adjusted the tax exemption to P70,000. We just want to preserve what the workers are enjoying before, because P30,000 is in actuality only P14,000 today,” he said in an interview.
Based on the computation of the committee, the increase in tax exemption would result in lost revenues of around P1.5 billion a year.
But Quimbo said that the government would be able to recoup these losses through taxes on purchased goods and direct taxes on deposits.
“Every peso that is lost from the national treasury through the additional exemption means increased purchasing power of the workers, which improves the economy. There’s really more upside to this proposal,” he said.
He added that this increased purchasing power translates to 38-percent recovery for the national government, or P550,000 of the P1.5 billion per year in lost revenues.
Raising the tax exemption ceiling will entail amending Section 32 of the National Internal Revenue Code.
In an earlier hearing, officials from the Bureau of Internal Revenue, Department of Finance, and the National Tax Research Center opposed the proposal.
If Congress approves the bill, they said it should also pass new revenue measures to cover the projected losses, such as amending the law granting fiscal incentives to big corporations. (MNS)