P82,000 tax-free bonus bill awaits P-Noy’s signature

MANILA, Philippines - The Congress-approved P82,000 tax-free yearend bonus bill should now be on President Aquino’s desk and is awaiting his signature.

House Majority Leader Neptali Gonzales ll said yesterday the bill was sent to Malacañang last Wednesday, a day before Pope Francis arrived in Manila for a five-day visit.

He said the measure becomes law once the President signs it.

Another House member, Isabela’s Rodolfo Albano lll, urged Aquino to sign the bill and not reject it.

 “The President should sign the bill or allow it to lapse into law. He should not veto the measure, which will benefit millions of employees,” he said.

A bill lapses into law if the President does not veto it within 30 days from the time it is sent to his office.

Albano said it is understandable for finance officials to recommend that Aquino veto the bill, since it would result in a revenue loss.

However, he said he does not agree with official projection that revenue loss would amount to tens of billions and would jeopardize vital social services.

“Not many employees receive P30,000 or more in monthly basic salary and an equal amount in yearend bonus and incentives. It is only those who are receiving more than P30,000 up to P82,000 who will benefit from the bill,” he stressed.

Albano pointed out that finance officials should consider that employees who would get a higher amount of tax-free yearend income would most likely spend it during the Christmas season.

“So the government would be able to recoup part of the revenue loss in terms of the 12-percent value added tax workers would pay on their purchases and in terms of other consumption taxes like those on gasoline and diesel,” he added.

The House of Representatives and the Senate approved the higher P82,000 tax-free bonus cap together with other important measures, including the P2.6-trillion 2015 national budget, before they adjourned for their month-long Christmas break last Dec. 19.

The President signed the budget into law before 2014 ended.

The House had proposed to increase the tax-free bonus from the current P30,000 to P70,000 but eventually decided to support the Senate-proposed P82,000-cap to expedite the approval of the measure.

Marikina Rep. Romero Federico Quimbo, ways and means committee chairman, said the P30,000 limit was set in 1994, or more than 20 years ago.

He said based on his committee’s studies, a P70,000 cap would result in a maximum revenue loss of P3 billion.

He said his committee would soon endorse revenue-raising bills like the rationalization of fiscal incentives and the measure imposing a 10-percent tax on sweetened beverages to allow the government to recover revenue losses.

Quimbo’s Senate counterpart Juan Edgardo Angara had proposed a P75,000 tax-free bonus limit. It was Sen. Ralph Recto who recommended the higher P82,000 cap, saying it was supported by computations made by the Bureau of Internal Revenue and the National Economic and Development Authority on the equivalent of P30,000 at today’s prices.