GOVERNMENT and private employees are expected to get a bigger take home pay this year following President Benigno Aquino 3rd’s signing into law of the measure increasing the tax exemption cap for 13th month pay and other benefits.
Senator Sonny Angara, the sponsor of the bill, said the 13th month pay and other benefits, including productivity incentives and Christmas bonuses not exceeding P82,000 will be exempted from tax effective this year.
Originally, Senate Bill 2437 set the ceiling to P75,000 but it was raised to P82,000 to expand the scope of the measure.
Angara said it was Bureau of Internal Revenue Commissioner Kim Henares who raised the amount, noting that P82,000 was worth P30,000 in 1994 when Republic Act 7833 which set the tax exemption ceiling at P30,000 was enacted.
Half a million employees will benefit from the law but it will cost government P30 billion a year in revenue loss based on projections of the Department of Finance.
The newly enacted law has provided for the automatic adjustment of the ceiling every three years, taking into account inflation.
“I thank the President for signing our bill despite strong opposition from the Finance Department. It’s a wonderful indication that the government is open to amending our outdated tax system and making it more fair and equitable to all our taxpayers,” Angara said.
The senator also hopes that the government will continue to support other measures that aim to ease the tax burden of workers.
Angara is also pushing a bill that seeks to lower individual income tax rates and adjust the brackets across-the-board. JEFFERSON ANTIPORDA