BIR urged to improve tax exemptions for minimum wage earners

MANILA, Philippines - Bureau of Internal Revenue (BIR) Commissioner Kim Henares was asked to approve a proposal of a coalition of labor unions to enhance the current fringe benefits and improve tax exemptions on the minimum wage of employees.

Trade Union Congress of the Philippines (TUCP) spokesman Alan Tanjusay said the proposal is part of the eight issues finalized last April 9 between coalition of labor unions Nagkaisa and select members of the Cabinet in a series of dialogues since 2012 for President Aquino’s approval on or before the Labor Day breakfast with the labor sector in Malacañang.

Philippine Airlines Employees Association (PALEA) president Gerry Rivera said Nagkaisa is pushing for Henares to impose tax only on the incremental amount of the negotiated minimum wage, not the entire amount itself.

“If union workers, for example, were able to successfully negotiate for a P10 wage increase on top of their minimum of P500 a day, we want only the added P10 to be taxed and not the entire P510,” he said. “We desire it to be like this in reverence of and to preserve the sanctity of collective bargaining negotiations between the worker and his employer. It’s useless to negotiate for a higher wage if the entire amount is taxed.”

Nagkaisa is also campaigning for the BIR to revise the current version of the de minimis fringe benefits enjoyed by unionized or regularized workers, Rivera said.

Not subject to any tax, the de minimis benefits are  privileges given by an employer to employees to    promote the workers’ health, company goodwill and efficiency of employees. Federation of Free Workers (FFW) president Sonny Matula said: “If the BIR approves the proposal, more employers will be encouraged to give fringe benefits to employees. 

“On one hand, the employees will be happy, and if employees are happy, then they will be more productive and loyal to the company.”  

Bukluran ng Manggagawang Pilipino (BMP) president Leody de Guzman said Nagkaisa is also pressing for Aquino to criminalize and eliminate contractualization of labor, deter union-busting and prosecute unexplained killings of labor organizers and journalists, institutionalize core labor standards in the agro-industrial plan, labor representation in the Energy Regulatory Commission (ERC), provide affordable housing program and non-violent transfer of urban poor communities from danger zones.

Nagkaisa proposes to revise the monetized unused vacation leave credits from the current 10 days to 15 days; retain the monetized value of vacation and sick leave credits paid to government officials and employees; medical cash allowance to dependents from P750 to P1,500 per employee per month; rice subsidy from P1,500 to P2,500 or one sack of 50kg of rice per month; uniform and clothing allowance from P4,000 to P6,000 per year; actual medical assistance, e.g. medical allowance to cover medical and healthcare needs, annual medical executive check-up, maternity assistance and routine consultation from P10,000 to P15,000; laundry allowance from P300 to P900; employees achievement awards in the form of tangible personal property other than cash gift or gift certificate with annual value not exceeding P10,000 to P15,000; gifts given during Christmas and major anniversary celebrations from P5,000 to P10,000 per year per employee; and daily meal allowance for overtime work and night shift from 25  to 34 percent of the basic minimum wage per region.