Workers to get additional P10,000 tax exemption

Malacañang announced on Sunday that workers will receive additional P10,000 tax exemption from their benefits beginning next month.

Presidential Communications Operations Office (PCOO) Secretary Herminio Coloma Jr. said Labor Secretary Rosalinda Baldoz and Finance Secretary Cesar Purisima announced the good news for millions of workers all over the country.

“This is the result of the approval by President Benigno Aquino III to new guidelines with regards to additional tax exemptions for the benefits to be given to the workers under the collective bargaining agreement (CBA) and productivity incentive schemes,” he said.

Coloma said the additional tax exemption was also the result of continuous dialogue by the President with the labor organizations.

“The new guidelines will be implemented in January 2015 through a revenue regulation to be issued by the Bureau of Internal Revenue (BIR),” the PCOO chief said.

Purisima described the additional tax exemption for the so-called de minimis benefits as rational because millions of workers will benefit from it.

“These workers are among those who receive lowest salaries,” Coloma said.

The total benefits which will be covered are expected to reach P104,225 from the present P94,225.

Almost P17 million will be deducted from the revenue collection of the BIR due to this additional tax exemption.

In its official gazette, the administration said the expanded list of de minimis benefits exempted from income tax on compensation  include benefits under CBAs  and productivity incentive schemes.

“This is a fitting gift to our workers in this holiday season,” Baldoz said, after the Department of Labor and Employment (DOLE) and the Department of Finance (DOF) had agreed to have the measure take effect in January 2015.

The Bureau of Internal Revenue, which is under the DOF, will issue new revenue regulations to make the measure effective.”

Baldoz recalled that expanding the list of tax-exempt de minimis benefits was one of the demands of labor at the dialogue with the President in the last Labor Day commemoration in May 2014.

At present, de minimis benefits—or benefits with relatively small values—are given by employers to their employee on top of the compensation and these benefits are not subject to withholding (tax exempt). Under RR 8-00, as amended by RR 10-00,  the following are recognized as de minimis benefits:

• 10 days monetized unused vacation leave credits;
• medical cash allowance to dependents of employees not exceeding P750 per semester or P125 per month;
• rice subsidy of P1,000  or one-sack of rice per month;
• uniforms and clothing allowance not exceeding P3,000 per year;
• medical benefits not exceeding P10,000.00;
• laundry allowance of P300 per month;
• employee achievement awards in the form of tangible personal property other than cash or gift certificate, with an annual monetary value not exceeding P10,000 received by the employee under an established written plan;
• flowers, fruits, books or similar items given to employees under special circumstances, e.g. on account of illness, marriage, birth of a baby, etc.; and
• daily meal allowance for overtime work not exceeding 25% of the basic minimum wage.  (With report from Philippine News Agency; information from payrollhero.ph)

source:  Manila Bulletin