On Wednesday October 22, Senate Ways and Means Committee chaired by Sen. Sonny Angara approves Senate Bill no. 2437 increasing the ceiling of taxable 13th month pay and other bonuses from the current 30 thousand pesos to 75 thousand.
The move came weeks after the House of Representatives approved on 3rd and final reading House Bill no.4970 by Rep. Miro Quimbo, Antonio Tinio and Christopher Belmonte seeking the same, to adjust the tax exemption ceiling of 13th month pay and bonuses from 30K to 70K.
In his sponsorship speech, Angara said it is the States’ obligation to ensure people are getting social justice and to ensure its citizens welfare. Thus the need to adjust the obsolete tax exemption brackets on worker’s bonuses which doesn’t match the current CPI (Consumer Price Index) and inflation rates.
Recto on the other hand, during his co-sponsorship speech said, although the gov’t may loose 2 to 5 billion pesos in tax collection from this measure, the loos can be compensated from the consumer tax which will be in effect of people getting more money to spend.
“Whatever is the revenue loss for the government is actually income gained for the workingman. And even if his 13th month pay is tax exempt upon receipt, it will be taxable when spent, so tax not withheld at source will… be captured in the form of sales tax at point of sale” – Sen. Recto
Senate Bill no. 2437 as per Committee Report no. 84 is a consolidated bill from the 4 bills seeking to adjusting the tax ceiling of 13th month pay and other bonuses as filed by Senators Ralph Recto (SB no 256, SB no.452 and SB no 1944), Lito Lapid (SB no 1838) and Sonny Angara (SB no. 2157)
The bill is now endorsed to the Plenary and is pending for 2nd reading.