Sen. Ralph Recto recently filed Senate Bill 256, which seeks to raise the tax exemption ceiling of bonuses to P75,000, up from the present P30,000 set by law (Republic Act 7833) some 30 years ago.
This is quite commendable considering the 13th month pay is given only once a year anyway and is much needed by workers to boost their incomes.
But before we raise the tax exemption on bonuses let us first make sure that employers are rightfully paying them and other benefits due to workers by law.
The Bureau of Working Conditions inspects thousands of firms every year, and up to 20 percent of them are found underpaying the minimum wage, depriving workers their 13th month salary and overtime pay. Other firms are found cheating their employees of their extra pay for work on holidays, or unlawfully withholding their Social Security System, PhilHealth and Pag-Ibig premiums.
Christmas has come and gone but instead of thanking their workers for their hard work and their contributions, a lot of these employers and businesses did just the opposite. These labor violators should be exposed and prosecuted to the full extent of the law.
The Labor department has to be stricter in implementing our labor laws or else many workers would continue to get Scrooged. It hasn’t been a very merry Christmas for them. And if things don’t change, it won’t be a prosperous new year either.
The Bureau of Internal Revenue should also investigate thousands of firms found underpaying their workers and violating other general labor standards, because they are potential tax dodgers too.
Firms that defraud their workers of lawful wages, or deprive them their social security protection and other statutory benefits, are several times more likely to be cheating as well in their tax payments.
On the other hand, firms dutifully complying with labor standards are several times more likely to be truthfully declaring their income and responsibly paying their tax liabilities.
The BIR should immediately audit the erring firms for possible non-payment or underpayment of their tax obligations.
The administration’s stepped up drive against tax evasion is very commendable.
The Department of Finance and the Department of Justice have been filing at least two criminal charges every week against suspected tax dodgers and smugglers.
But for sure many more are out there. Like I said, if these firms could shortchange and cheat their employees, they could surely do the same to the government and the consumers.
Besides overpricing and producing substandard goods and services at the expense of consumers, there are only two ways by which unscrupulous firms cut corners to rake in excessive profits—by shortchanging workers and cheating on taxes.
In the interest of fair play, the Department of Trade and Industry and the Department of Labor and Employment should combine forces in ensuring the rigorous enforcement of, and compliance with new regional minimum wage rates and other labor regulations.
Firms that underpay their workers, or violate other labor standards compete wrongfully and unfairly with law-abiding establishments that are properly compensating their employees.
We recognize that every business is entitled to earn a reasonable profit. However, respect for basic labor rights should form part of the framework within which every business must compete freely and honorably.