MANILA, Philippines — The tax exemption cap of 13th month pay and other bonuses will be raised to P90,000 effective next year, as agreed upon by members of the bicameral conference committee on the Tax Reform for Acceleration and Inclusion (TRAIN) bill.
The new tax-exempt ceiling was a compromise between the P82,000 tax-free cap retention of the Senate version and the P100,000 ceiling increase of the House of Representatives.
“Ngayong magpa-Pasko na po, napagkasunduan ng bicam na muling taasan ang halaga ng 13th month pay at iba pang bonuses na hindi na kakaltasan pa ng buwis,” Sen. Sonny Angara said in a statement released Thursday.
Under the current law, the 13th month pay and other benefits are exempted from tax if they do not exceed P82,000.
Members of the committee have also approved the proposal to exempt P250,000 annual taxable income of all individual income taxpayers, as proposed in the TRAIN bill.
“Kung susumahin, aabot na sa P340,000 na kita kada taon ang hindi na pwedeng galawin ng gobyerno. Buong-buo na itong maiuuwi ng ating mga taxpayer sa kanilang mga pamilya,” Angara said.
Aside from Angara, Sens. Ralph Recto, Loren Legarda, Migz Zubiri and Reps. Dakila Cua, Miro Quimbo, Sharon Garin, Danilo Suarez, Gus Tambunting, Xavier Romualdo and Aurelio Gonzales attended the bicameral conference Wednesday.
The Department of Finance originally proposed to scrap the tax exemption on the 13th month pay and make it part of the all-inclusive P250,000 tax exemption.
Angara reminded employers to pay their rank-and-file employees a 13th month pay, which must be given not later than December 24 as mandated by law. It should be equivalent to one-twelfth of an employee’s annual basic salary.