AN awaited bill raising tax cap on year-end bonuses, to grant tax exemptions on workers’ 13th-month pay up to P82,000 from the existing P30,000 limit, is not on the list of Palace priority bills that Malacañang wants Congress to pass quickly.
According to Communications Secretary Herminio B. Coloma Jr., the Aquino administration’s priority measures pending in Congress, as of now, are “the proposed 2015 national budget; the supplemental budget recently submitted by [the] Department of Budget and Managament; the proposed Bangsamoro basic law; and the joint congressional resolution needed to address the projected power-supply deficiency for next year.”
Coloma told reporters at a news briefing that the Office of the President was leaving it up to both chambers of Congress to act on the proposed bill being pushed by Sen. Ralph Recto to adjust the tax cap on 13th-month bonuses eroded by inflation since the tax cap was imposed in 1994, or 20 years ago.
“Iyan po ay nasa pagpapasya ng ating Kongreso. Meron na pong naipasang batas ang Kamara de Representantes, at nasa final stages na doon sa Senate. Nasa pagpapasya po ’yan ng Kongreso,” the Palace official said.
He noted that in the process of crafting Recto’s remedial legislation, both the Department of Finance and the Bureau of Internal Revenue already gave their inputs to guide lawmakers in their deliberation on the measure. “So let us just wait what would be the final form that lawmakers will pass.”
Coloma indicated, however, that the Executive branch would still need to review the final version that would come out of Congress as the government is always striving for a situation where legislation should be “revenue neutral,” or not result in loss of revenue.
“Kailangang tingnan kung ano ’yung itatadhana ng batas na ilalabas ng Kongreso at sa lahat ng pagkakataon ang sinisikap na matamo dito ay ’yung sitwasyon na hindi mawawalan ng rentas internas ang ating pamahalaan,” he said.
Coloma also indicated that President Aquino is not likely to certify urgent passage of the Recto bill for early enactment into law so workers and their families could enjoy the benefit of the higher tax cap on 13th-month bonuses this coming Christmas.
Coloma explained that the President uses “sparingly” his power to certify bills as urgent. “Ginagamit lang ’yan sparingly at kung meron talagang emergency,” he said.
Recto, in filing the bill increasing to P82,000 the tax-exemption cap for 13th-month pay and other bonuses, said “the amount merely restores the value of the peso, which has been lost to inflation since 1994,” adding that “the peso has lost two-thirds of its value over the past 20 years.”
According to Recto, “P1 in 1994 is worth 36 centavos today. Adjusted to inflation, the P30,000 then should be P82,300 today. That is why we peg the new cap at P82,000.”
Recto recalled that when the existing cap was imposed in 1994, “the minimum jeepney fare was P1.50; rice was P13 a kilo; bread was sold for P7 a loaf, gasoline was priced at P8.50 a liter; a can of sardines was P6.”
He added that the P30,000 was set so that it could cover the highest salary in the government then which is that of the President who was then receiving P25,000 a month. “The idea was that when all government employees get their 13th month pay, it will be in full and without tax deduction.”
Recto asserted that the hike in the tax exempt cap should not be viewed as a revenue loss for the government but as “income gained by the workingman.”
“And even if his 13th month pay is tax-exempt upon receipt, it will be taxable when spent, so tax not withheld at source will later be captured in the form of sales tax at points of sale,” the senator said.