Congress wants work bonuses up to P75k exempted from tax

MANILA, Philippines - Both chambers of Congress have agreed to pass a bill that increases the tax exemption limit on workers' 13th month pay, Christmas bonuses and other benefits, Senate President Franklin Drilon said Tuesday.

Drilon said Senate Bill No. 256 aims to raise the exclusion limit on an individual's work bonuses from income taxation from the current imposed limit of P30, 000 to P75,000.

He said both chambers are aware of the need to revisit the provisions of Republic Act No. 7833 "to provide relief to state and private workers whose purchasing power has been shrinking for years due to inflation, but still have had to deal with the consequences of an outdated law."

"The law was passed 20 years ago, and obviously, things have greatly changed - making such figures no longer reflective of current economic realities, thus making it even more difficult for the average Filipino worker to make both ends meet for him and his family," Drilon said.

The law imposed the P30,000 cap on bonuses back in 1994 when the lowest monthly basic salary for government employees (Salary Grade 1, Step 1) was tagged at P2,800, while the President of the Philippines (Salary Grade 33) received P25,000 per month.

Today, the basic salary for government employees is now estimated at P9,000, with the highest salary reaching P 120,000 per month.

Drilon said the measure that would increase the tax exemption cap on bonuses will receive urgent legislative attention "due to its direct effect to millions of Filipino workers around the country."

He said such legislative measure are needed to address the real-time concerns and immediate demands of Filipinos.

"While most of the priority bills right now focus on macroeconomic progress, we have to make sure that necessary bills such as SBN 256 will also receive the required resources and attention towards their passage, for the sake of our countrymen," Drilon said.