Increasing the tax-exemption ceiling of 13-month pay and other bonuses would not cause the government to lose P30 billion in revenues, the chairman of the House Committee on Ways and Means said over the weekend.
Liberal Party Rep. Romero Quimbo of Marikina City issued the statement in reaction to the claim of Internal Revenue Commissioner Kim Jacinto-Henares that the proposed measure would result in “significant” losses for the government.
“The P30-billion loss [mentioned by Henares] is not true. We won’t exceed a P4.5-billion [loss] based on the National Family Expenditure Survey,” Quimbo said.
In a television report, Henares said increasing to P82,000 from P30,000 the tax-exemption ceiling of 13th-month pay and other bonuses would result in a P30-billion loss for the government. She also said that only 6 percent, or 1.5 million employees, would benefit from higher tax exemption.
“We have to remember that these people have been shouldering the taxes for the last 20 years, so we should give relief to those who are carrying the burden. The middle class will benefit from this,” said Quimbo, one of the authors of the bill in the lower chamber.
Earlier, Sen. Juan Edgardo Angara, coauthor and sponsor of the measure in the Senate, said that, once the bill is enacted into law, employees receiving 13th-month pay and other benefits, including Christmas and productivity bonuses, not exceeding P82,000 will be exempted from tax.
Under the measure, authors seek to increase the tax-exemption cap for 13th-month pay and other bonuses by amending the National Internal Revenue Code of 1997, as amended. The bill targets to exclude 13th-month pay and other Christmas bonuses from the computation of the gross income for the income tax of all employees in both the private and public sectors. It also mandates the Department of Finance and the Bureau of Internal Revenue to increase the threshold every three years, based on the consumer price index and inflation.