Solon seeks higher 13th month pay tax exemption

Posted at 03/20/14 5:46 PM

MANILA - Another lawmaker on Thursday filed a bill to increase the cap for the income tax exemption of the 13th month pay and Christmas bonuses of officials and employees in private and public offices.

Nueva Ecija First District Rep. Estrellita Suansing filed House Bill 3974, seeking to amend the National Internal Revenue Code (NIRC) of 1997, as amended, to increase to P75,00 from the present P30,000 the ceiling of the 13th month pay, Christmas bonus and other benefits excluded from the computation of the gross income for the purposes of income taxation.

In a statement, Suansing said if enacted into law, her proposal would not only reward government employees and employees from the private sector who work hard to contribute to the income generation of the government and delivery of basic services to the people, but also would greatly help in boosting these workers’ morale and improving their living conditions.

"The P75,000 ceiling will be more responsive to the needs of the times," Suansing said.

The lawmaker cited the present P30,000 ceiling was first introduced in 1994 upon the effectivity of Republic Act 7833. At that time, the lowest monthly basic salary for government employees in the Salary Grade 1, Step l level was P2,800 and P25,000 for those occupying Salary Grade 33 positions.

“Nowadays, the basic salaries have been adjusted such that Salary Grade 1, Step l positions now stand at P9,000 and Salary Grade 33 at P120,000,” she said.

Several bills have earlier been filed seeking to raise the ceiling of the 13th month pay and other benefits excluded from the computation of gross income. These are House Bill 248 filed by Rep. Antonio Tinio (Party-list, ACT Teachers); HB 2835 by Rep. Abigail Binay (2nd District, Makati City); HB 3629 by Rep. Raneo Abu (2nd District, Batangas); and HB 3670 by Rep. Jerry Treñas (Lone District, Iloilo City).

House Bill 3974, co-authored by Rep. Angelina Tan, M.D. (4th District, Quezon) and now pending at the House committee on ways and means chaired by Rep. Romero Quimbo (2nd District, Marikina), seeks the amendment of Section 32(B) Chapter VI of the NIRC of 1997, as amended, so that the gross benefits received by officials and employees of public and private entities such as the 13th month pay and other benefits shall not be included in gross income and shall be exempt from taxation.

The amendment further provides that the total exclusion shall not exceed P75,000, and provided that not later than three years after the effectivity of the Act and every three years thereafter, the amount shall be adjusted to its present value using the consumer price index, as published by the National Statistics Office (NSO).