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    Posted March 20, 2014 by

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    Phl to raise 13th month tax exemption

    THE move to raise the cap for the income tax exemption of the 13th month pay and Christmas bonuses of officials and employees in private and public offices has gained ground in Congress, with another lawmaker seeking such increase.
    Rep. Estrellita Suansing of Nueva Ecija Province filed House Bill 3974 seeking to amend the National Internal Revenue Code (NIRC) of 1997, as amended, to increase to P75,000 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.
    Suansing said if enacted into law, her proposal would not only reward the workers of the State and private sector who tirelessly toil in contributing 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.
    She assured that while there will be revenue foregone with the passage of the proposal, such income lost could be recouped through increased expenditures of the people and pump-priming cash flow to the economy in the process.
    "The P75,000 ceiling will be more responsive to the needs of the times," Suansing said.
    She cited the present P30,000 ceiling was first introduced in 1994 upon the effect of Republic Act 7833. At that time, she said 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," Suansing 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; HB 2835 by Rep. Abigail Binay; HB 3629 by Rep. Raneo Abu; and HB 3670 by Rep. Jerry Treñas.
    Suansing said HB 3974 gives spirit to the following constitutional provisions: Article II, Sec. 9 provides the State shall promote adequate social services, promote full employment, a rising standard of living, and an improved quality life for all; Art. XIII, Sec. 1 provides that Congress prioritizes enactment of measures to protect and enhance the right of all the people to human dignity; Art. XIII, Sec. 2 provides for the promotion of social justice; and the State policy to affirm labor as a primary social economic force by protecting the rights of workers and promoting their welfare.
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