MANILA – The bicameral conference committee on the Tax Reform for Acceleration and Inclusion (TRAIN) agreed Thursday to set a higher cap on the tax-exempt Christmas bonus of workers, and the TRAIN bill’s chief sponsor in the Senate said this goes together with the adjustment of the income tax exemption to P250,000 to ensure workers bring home much bigger pay by 2018.
The bicameral committee raised the 13th month pay’s tax-exempt ceiling to P90,000 from P82,000. This means the government will only tax the amount in excess of P90,000.
The two panels reached the compromise after the House of Representatives group initially batted for a ceiling of as much as P100,000.
Sen. Juan Edgardo Angara called the provision a good “Christmas gift” for labor.
He happily announced that the Senate version of a higher ceiling of P250,000 for wages to be exempted from payment of personal income tax was adopted by the bicameral committee.
Right now, only minimum wage earners – or those earning P140,000 annually – are exempt from payment of income tax, but once their pay breaches the P140,000 level, their entire salary will be subject to tax. This, tax experts noted earlier, had created the ridiculous scenario of many workers declining to be promoted because once their wages breach P140,000, the resulting tax eats into their salary so much they are left with a smaller take-home pay than when they were still within the minimum wage range and tax-exempt.
Under the bicameral-approved version, the yearly income of any individual up to P250,000 – whether one is regularly employed, self employed, or professional – will be tax-free. Only the income beyond P250,000 will be subject to tax, and this, said Angara, means a bigger take-home pay for most people.
SUGAR-SWEETENED BEVERAGES, COAL AND COSMETIC TAXES
Meanwhille, the bicameral panel also agreed on the rate to be imposed on sugar-sweetened beverages:
• 6 pesos per liter for juices and energy drinks
• 12 pesos per liter for drinks using high-fructose corn syrup like some softdrinks.
At press time, the House and Senate panels still could not agree on certain items in the tax package, however: notably the coal tax, which was increased by 3,000% and the tax on mining.
The House panel also continued to oppose the cosmetic tax, but senators, notably Franklin Drilon, insisted it should be included because cosmetic procedures to adjust one’s physical features can be afforded only by the rich.
The final bicameral session is slated on Friday (Dec. 8), and the two chambers’ representatives may simply agree on a compromise – that is, a tax will be imposed, but at a lower rate.
By Monday, Dec. 11, lawmakers expect to have the final bicameral conference committee version of TRAIN, for ratification by each chamber.
