Contrary to its claim, the government will not lose significant
revenues over a recently approved measure raising the threshold of the cap on tax-free bonuses to P82,000 from P70,000.
This was pointed out on Friday by Rep. Romero Quimbo of Marikina City (Metro Manila), chairman of the House ways and means committee, as he disputed earlier declaration by Commissioner Kim Henares of the Bureau and Internal Revenue (BIR) that the measure would only benefit 500,000 workers and result in P30-billion loss in government revenues and would not translate to increased purchasing power for the workers.
“That amount of P30 billion is not true. It is definitely less than that… probably won’t exceed P4.5 billion based on the National Family Expenditure Survey. We have to remember that the beneficiaries of this are the people who have been shouldering the taxes for the last 20 years even if their salaries have not been up to par,” Quimbo, a lawyer, told reporters.
Since 85 percent of the 24 million workers in the country are minimum wage earners and are exempted from paying income tax charge, he said, those who are paying taxes diligently should also be given aid.
“We only have around six million in the workforce who are paying taxes since they are not minimum wage earners. With such a small tax base, why would the government pound these people with more taxes instead of the opposite?” Quimbo argued.
He also earlier said the BIR cannot stop implementation of the higher cap amount of tax-free bonuses once President Benigno Aquino 3rd signs the measure into law since the bill does not provide for Implementing Rules and Regulations (IRRs).
“We have expressly stated in this revenue measure that this will be effective immediately, notwithstanding the issuance of the IRRs because in the past, the BIR can stop laws on taxes by not issuing the IRRs immediately. This is very simple and the figures are easy to compute,” Quimbo added.
“The IRRs [are]for clarifying issues and there’s none. This has to be made effective as soon as possible because this will affect more than a million people. We don’t want to be tied with what the executive will have to do,” he said.