Solon slams junking of P100k limit on bonuses
AN OPPOSITION leader in the House of Representatives on Saturday slammed the Senate for throwing out the House’s initiative to increase to P100,000 the aggregate amount of 13th month pay, Christmas bonus and other benefits that may be received tax-free by employees every year.
“The whole point of the higher ceiling for tax-exempt bonuses and other benefits is to help as many employees as possible. The higher the limit, the greater the number of potential beneficiaries,” Buhay Rep. Lito Atienza, senior deputy minority leader, said.
“On top of the mandatory 13th month pay, a growing number of employees are now getting Christmas bonuses, productivity incentive handouts, loyalty rewards, cash gifts and other benefits of similar nature, and they deserve to fully enjoy all these subsidies,” Atienza said.
The proposed Tax Reform for Acceleration and Inclusion Act, as embodied in House Bill 5636, passed by the House in May raised from P82,000 to P100,000 the maximum amount of 13th month pay, Christmas bonus and other benefits that may be earned by employees free of withholding income taxes.
But the provision in HB 5636 was dumped when the Senate ways and means committee sent the measure out for plenary debate and approval.
“The exclusion is unfair to compensation earners who for years have endured the burden of paying for the lion’s share of all personal income taxes,” Atienza, former three-term mayor of Manila, said.
Atienza has been batting for the passage of key measures seeking to assure employees a rising standard of living, including a bill that proposes to require all corporations to distribute at least 10 percent of their annual net income to their workers as profit share.
Under the proposed Profit-Sharing Act, the amount handed out by a corporation as the 10-percent profit share of its employees shall be treated as tax credit that may be used by the firm to pay for its income tax obligations the following year.
The shared profit shall not affect or diminish in any way the salaries, 13th month pay and other existing statutory as well as collective bargaining agreement (CBA)-specified benefits enjoyed by employees.
“Our proposal is a great way to give employees a sense of ownership in the business, and for corporations to keep workers highly driven and productive,” Atienza said.