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Senators laud signing of law for higher tax cap on bonuses

Christina Mendez (The Philippine Star) - February 13, 2015 - 1:44pm

MANILA, Philippines - Senate President Pro-Tempore Ralph Recto and Sonny Angara on Friday lauded the signing into law a measure that adjusts the ceiling of the 13th month pay and other benefits excluded from the computation of gross income tax from P30,000 to P82,000.

"I congratulate both houses of Congress and the President for working together in granting our Filipino workers this long overdue tax relief and letting them benefit more from their hard-earned money,” said Angara, chairman of the Senate ways and means committee.

Angara said the new law now becomes a Valentine’s Day offering since the measure did not come right on time as a Christmasn gift last December.

With the signing of the law, the 13th month pay and other benefits, including productivity incentives and Christmas bonuses, not exceeding P82,000 given to both government and private sector employees will be exempted from tax.

This sought to amend Republic Act 7833 which set the tax exemption ceiling at P30,000 way back in 1994.

Angara said the new law has provided for the automatic adjustment of the ceiling every three years, taking into account inflation, to ensure that the tax ceiling won't be left unchanged again for more than two decades.

"It's a wonderful indication that the government is open to amending our outdated tax system and making it more fair and equitable to all our taxpayers,” Angara added, noting how the measure faced strong opposition from the Department of Finance.

“I hope our government would be one with our goal of not overtaxing what Juan Dela Cruz has earned for himself and his family," said Angara, who also filed a bill that seeks to lower individual income tax rates and adjust the brackets across-the-board.

Recto also thanked the President for signing the bill.

“The law is meant to provide economic relief to workers both private and public, whose purchasing power has been substantially eroded due to inflation because RA 7883, which is the original law granting the benefit, took effect 20 years ago and has never been adjusted,” said Recto, principal author of the measure.

“The measure will increase the disposable income of workers which will not only allow them to celebrate a merrier Christmas but also pay for tuition, medical attention and other basic necessities. This supports a stronger, hardworking and productive middle class who are the country’s engine of growth,” Recto said.

Recto looks forward to working with the executive in crafting other priority bills that will bring relief to workers in business and government.

“The passage of the law means that the government is concerned with the people’s welfare and is one with their aspirations for a better life,” Recto added.

ANGARA CHRISTMASN CONGRESS AND THE PRESIDENT DEPARTMENT OF FINANCE JUAN DELA CRUZ LAW RECTO REPUBLIC ACT SENATE PRESIDENT PRO-TEMPORE RALPH RECTO AND SONNY ANGARA TAX
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