Senate on Wednesday November 26, 2014 has finally passed in 3rd and final reading Senate Bill 2437 seeking to adjust the ceiling of non-taxable 13th month pay and other bonuses from Php30,000 to Php82,000.
In a vote of 14-0, the Philippine Senate approves SB 2437 that will raise the cap of tax exemptions for the 13th month pay and other bonuses of employees. The move came unexpectedly fast as sponsors of the bill promised to make it passed in the 1st week of December since the Senate is currently deliberating on the 2015 budget. It only took a week after passing it on the 2nd reading to be finally approved on this 3rd and final one.
With this development, all employees who are earning Php82,000 and below from their 13th month pay and bonuses will be exempted from paying the mandatory 32% income tax.
Next step after this would be the Bicameral Conference wherein the Senate and House Bill versions are going to be consolidated before handing it over to the President for signature.
But according to the latest reports, the House panel today announced that they will adopt the Senate version of the bill thus no need for a bicameral conference committee, so the bill will now going to be endorsed to the President for its enactment and signature. After the law is enacted, it will take effect 15 days after its publication on national dailies.
Full implementation of this new law is expected to be done in 2015 after the executive department issued its Implementing Rules and Regulations.