House, Senate panel raises tax-free 13th month pay to P90K
MANILA, Philippines – Members of the bicameral conference committee on the Tax Reform for Acceleration and Inclusion (TRAIN) bill have agreed to increase the tax exemption cap of 13th month pay and other bonuses to P90,000 from P82,000.
This is not yet final, as the House and the Senate have to first approve the bicam version of the measure. Once it is done, the bill would then be sent to Malacañang for President Rodrigo Duterte’s signature.
If signed into law, the measure would be implemented starting January 1, 2018.
The P90,000 amount was a compromise between the House and the Senate, which had disagreeing provisions in their respective versions. The Senate retained the P82,000 tax-free cap while the House wanted to raise it to P100,000.
The original proposal from the Department of Finance sought to scrap the 13th month pay tax exemption and make it part of the P250,000 income tax exemption.
Under the law, the 13th month pay should be given to private sector employees not later than December 24. It must be equivalent to one-twelfth (1/12) of the basic salary of an employee within a calendar year.
Earlier, members of the bicameral conference committee have also agreed to tax-exempt the first P250,000 annual income of all individual taxpayers.
“Kung susumahin, aabot na sa P340,000 na kita kada taon ang hindi na pwedeng galawin ng gobyerno. Buong-buo na itong maiuuwi ng ating mga taxpayer sa kanilang mga pamilya,” Senate ways and means committee chair Juan Edgardo Angara said in a statement.
(In total, the government could no longer touch P340,000 of a person's annual income. This can be wholly taken home by the tax payer to his or her family).
Congress has only until December 13 to pass the measure, as they are set to go on Christmas break. – Rappler.com