House open to P82,000 tax-free bonus

MANILA, Philippines - The House of Representatives is willing to support the Senate proposal for a higher amount of tax-free year-end bonus and incentives.

“Ours is P70,000, but we are open to considering their proposal to increase it to P82,000,” Marikina Rep. Romero Federico Quimbo, appropriations committee chairman, told reporters yesterday.

He said both amounts were arrived at by computing inflation since 1994, when the present tax-free bonus of P30,000 was fixed, up to this year.

“So if we reconcile the Senate version and our bill, it would just be easy. We will just re-compute inflation based on official data. If it is P70,000, we will insist on our version. If it is P82,000, we will support their version,” he said.

He said the problem with going for a higher amount is its impact on government revenues.

Quimbo pointed out that based on his committee’s simulations and testimonies from knowledgeable resource persons, the House version would result in a revenue loss of P800 million to P2.4 billion a year.

“A higher amount will certainly involve a higher revenue loss figure,” he added.

He said as soon as the Senate approves its bill on third and final reading, he would suggest that representatives of the two chambers convene a conference to reconcile their versions.

“We should approve this measure the soonest possible time. The bigger battle is on the proposed restructuring of individual and corporate income tax rates,” he said.

Quimbo’s Senate counterpart, Sen. Juan Edgaro Angara, originally endorsed a P75,000 tax-free bonus.

However, before the Senate approved its version last week on second reading, Sen. Ralph Recto presented an amendment to increase it to P82,000.

“I welcome the amendment of Sen. Recto, the resident tax expert of the chamber. He is correct in saying that if we are to follow the logic of the proposal, we must use the correct figure consistent with the inflation rate,” Angara said.

“In fact, the same figure was given by BIR (Bureau of Internal Revenue) Commissioner Kim Henares in one of the hearings when she said that P30,000 in 1994 would be worth around P82,000 today,” he said.

Recto said P82,000 was also the amount the National Economic and Development Authority (NEDA) arrived at when it computed inflation from 1995 up to last month.

The Senate is proposing that the higher tax-free bonus take effect next year, since it is already too late to make it effective this year.