Increase in Tax Exemption of Bonuses now a Republic Act

tax_exemptionPresident Aquino signed into a law a bill the yearly tax exemption from Php30,000 to Php82,000 for bonuses as Republic Act No. 10653. Iloilo City Representative Jerry Treñas, a principal author of the bill and one of the strongest proponents of the tax exemption increase measure in the House of Representatives, said that he is grateful for the support of the President. “President Aquino fully supports this initiative. I pushed for this measure in the House and it garnered support from my colleagues regardless of their political affiliation. We are united in our belief that we should provide tax relief to our heavily burdened citizens, our people who toil day and night as employees in both the public and private sector,” said Treñas.

The Iloilo City solon cited the strong clamor in Iloilo City to increase ceiling of tax exemption of bonuses received by public and private employees. Treñas mentioned that as the former three term Mayor of Iloilo City, he is well aware of the need of public sector employees to enjoy their bonuses in full, given the rising cost of living and periodic rise of inflation rates. Moreover, Treñas said that a good number of private sector employees are only receiving the minimum wage, hence the bonuses that they receive are likewise relatively small.

“The bulk of the people in Iloilo City, and the rest of the country for that matter, earns an honest meager wage. Their Christmas bonus is likewise small since it is based on their monthly salary. I know how bad it feels to have your meager bonus slashed by tax even before it reaches your pocket,” said Treñas.

He further mentioned that the bill will benefit the working class. Treñas said that managerial employees who receive extremely generous benefits will still be taxed, as their bonuses amount higher to the new Php82,000 threshold. “I authored this bill for the people who go to work from 8 to 5 everyday, for those who struggle to survive from pay check to pay check, for regular Ilonggos who earn money through honest work but receive far less than what they earn because of automatic tax deduction,” said the Ilonggo Congressman.

Treñas also said that the regular employees have no recourse from income taxation, since their income tax is deducted from their paycheck even before they receive their salary. He mentioned that the increase in take home pay to result from this new legislative measure will also generate greater tax collection by the government through increased spending by the public.