Monday, December 9, 2013

Recto seeks higher tax exemption ceiling for 13th month pay, Christmas bonuses


MANILA-Senate President Pro-Tempore Ralph G. Recto has filed a measure seeking to increase the cap imposed by law on the amount of 13th Month Pay, Christmas bonus and other benefits exempted from income tax.

Present laws exclude the mandated 13th Month Pay and the Christmas bonus from the coverage of income taxes, but only up to the extent of P30,000. Any amount in excess forms part of an individual’s gross income and therefore subject to the operation of the National Internal Revenue Code.

In filing Senate Bill No. 256, Recto wants the exclusion raised to P75,000, explaining that the present ceiling was set by a law enacted almost 20 years ago.

“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,” the senator said.

Recto said his proposal is premised on the fact that the prevailing conditions in 1994 – the year Republic Act No. 7833 or the statute that imposed the P30,000 cap was enacted – no longer apply to present circumstances.

“At that time, the lowest monthly basic salary for government employees (Salary Grade 1, Step 1) was P2,800 and that of the President of the Philippines (Salary Grade 33) was at P25,000,” he said.

At present, he added, the basic salaries have been adjusted such that SG-1 Step 1 now stands at P9,000 and SG-33 is at P120,000.

To bolster his position, Recto said that the National Tax Research Center (NTRC) and National Economic 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.

Furthermore, the measure also provides that the ceiling of P75,000 shall be adjusted to its present value 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.

If passed into law, Recto said the increase in the tax exemption ceiling would translate to a higher take home pay for employees in the private and government sectors alike, particularly during the Christmas season, when the 13th Month Pay and other bonuses are usually released.

“It is of paramount importance that our laws be responsive to the needs of the people. An increase in the ceiling of the 13th Month Pay and other benefits to be exempted from income tax is one of the reliefs the people need during these hard times,” the senator said.

No comments:

Disclaimer

Disclaimer: The comments uploaded on this blog do not necessarily represent or reflect the views of management and owner of "THE CATHOLIC MEDIA NETWORK NEWS ONLINE".

Should the Philippine government legalize same-sex marriage?