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Bicam raises bonus tax exemption cap

  • Written by Camille P. Balagtas
  • Published in Nation
  • Read: 247

MEMBERS of the bicameral conference committee on the Tax Reform for Acceleration and Inclusion (TRAIN) bill agreed on Wednesday to increase the tax exemption cap of the 13th-month pay and other bonuses to P90,000.

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

Before RA 10653 was signed into law in 2015, only bonuses not exceeding P30,000 were tax-exempt.

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

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

Among the conferees who attended the bicam meeting were Sen. Sonny Angara, Senate Pro Tempore Ralph Recto, Senators Loren Legarda and Migz Zubiri, House Ways and Means Chairman Rep. Dakila Cua, House Deputy Speakers Miro Quimbo and Sharon Garin, House Minority Leader Danilo Suarez, Reps. Gus Tambunting, Xavier Romualdo and Aurelio Gonzales, as deputized by House Majority Floor Leader Rudy Farinas.

Bicam members have also agreed to exempt 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,” Angara said.
    
The original proposal from the Department of Finance sought to scrap the 13th-month pay tax exemption and to make it part of the all-inclusive P250,000 income tax exemption.
    
Under the law, the 13th-month pay should be given to private sector employees not later than December 24. It must be equivalent to one-twelfth (1/12) of the basic salary of an employee within a calendar year.
    
The senators reminded employers that they must pay their rank-and-file employees 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.