Solons want higher ceiling for exclusion of Christmas bonus, other benefits from taxation

TWO lawmakers are seeking an increase in the ceiling for total exclusion of the Christmas bonus and other benefits from the computation of taxable income from P30,000 to P40,000 to provide workers and employees a reprieve from the country’s worsening economic condition.

Bayan Muna Reps. Neri Colmenares and Teddy Casiño pointed out that bonuses and other additional benefits during Christmas come only once a year, and at a time when prices of commodities increase because of the demand for more food on the table to celebrate the season.

“It would mean a lot to the minimum wage earners to be relieved from additional tax burdens for their Christmas bonuses and other benefits,” said Colmenares, a Vice Chairman of the House Committee on Suffrage and Electoral Reforms.

Colmenares said that for public employees, the government might as well give them the full benefit of their bonus as a Christmas gift from the government.

Casiño, Chairman of the Committee on Small Business and Entrepreneurship Development, said Filipinos need a reprieve from the worsening economic conditions given that labor laws still need to be reformed to address the real economic conditions of workers and employees more than the business companies.

He said wages lag way behind the family living wage because the law only allows one wage increase per year while the prices of basic commodities from gasoline to food have been shooting up to heights that more and more Filipinos are unable to cope with.

“Regions also vary because of so-called differing living conditions so that wages are set by Regional Wage Boards. That is why the Social Weather Station (SWS) March 19 to 22, 2010 survey found 43 percent or an estimated 8.1 million families rating themselves as “mahirap” (or poor), matching the record low set in March 1987. Although the government sees this as an improvement from the previous years (in July 2001, 66 percent considered themselves poor), it is still a significant figure at 48 million people,” Casiño said.

The lawmakers’ proposal, House Bill 4177 seeks to amend Section 32 (B), Chapter VI of Republic Act 8424 or the National Internal Revenue Code so that the gross benefits received by officials and employees of public and private entities shall be excluded from gross income and shall be exempted from taxation, provided that the total exclusion shall not exceed P40,000. The present law provides a gross income exclusion ceiling of P30,000.

The measure also provides that the P40,000 ceiling may be increased through rules and regulations issued by the Secretary of Finance, upon recommendation of the BIR Commissioner after considering among others, the effect on the same of the inflation rate at the end of the taxable year.

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