Congress moves to raise tax exemption cap for bonuses

BOTH CHAMBERS of Congress are moving to give employees some succor in time for Christmas in the face of rising prices, with one such measure hurdling the committee level in the House of Representatives yesterday.

The House committee on ways and means yesterday approved a measure seeking to more than double the income tax exemption cap for employee bonuses to P70,000 from the current P30,000 ceiling. The body is now drafting a consolidated measure from at least nine bills dealing with this proposal. The measure covers the 13th month pay “and other benefits” like Christmas bonus and productivity incentives.

“What we approved today is... we’re exempting all Christmas bonuses... 13th month pay to the extent of P70,000 that will no longer be taxed,” committee chairman Rep. Romero S. Quimbo of Marikina (2nd district) told reporters at the sidelines of a committee hearing, citing a pressing need to raise the exemption ceiling in order to provide Filipino workers some relief from continued rising prices.

He noted that the current exemption level was set in 1994, hence, the need to adjust the current value to take inflation into consideration.

The approval of such measure is a first in recent years. Two similar bills were filed in the 15th Congress, but failed to gain the nod even at the committee level.

Also yesterday, Senate President Franklin M. Drilon said his chamber has already agreed with the House to approve the measure in time for Christmas season.

“We have an agreement with the House of Representatives that we will pass this bill within the year, so that Christmas could be merrier for our workers,” a statement quoted him as saying.

“There is really a need to revisit the antiquated provisions of Republic Act No. 7833, which imposed the P30,000 cap on bonuses back in 1994.”

The Trade Union Congress of the Philippines (TUCP) lauded the committee approval of the bill. “A legislative measure such as this is very much welcome, especially at this time when workers... worked so hard to bring about improved economic growth of the country,” TUCP spokesman Alan A. Tanjusay said in a text message, referring to gross domestic product growth that slowed but still surprised at 6.4% last quarter, spurring first-half economic expansion to 6.0% against the government’s 6.5-7.5% target. “We want to see the bill become into law so that Filipino workers will feel rewarded for their hard work.”

The Employers Confederation of the Philippines (ECoP) also threw its support behind the measure, saying it could help lessen workers’ demand for an increase in wages. Besides that, ECoP President Edgardo G. Lacson added that the proposal would help stimulate the economy.“It’s very very positive,” Mr. Lacson said in a telephone interview. “What the government will lose in [income] tax, they can collect in other taxes” that will rise with increased consumption.

The House ways and means committee is also set to consolidate nine measures seeking to trim individual and corporate income tax rates, again citing the need to adjust levels to inflation.

“We are taxing individuals more now for the same value of their salaries,” Mr. Quimbo noted.

“Tax burden today is being shouldered by ordinary income earners because they have no choice.”

The Senate is in sync with the move, with Mr. Drilon yesterday saying: “Congress is aware of the necessity to revisit our existing tax structure, which has remained unchanged since 1997.”

“Congress is committed to pass legislation that will lower individual income taxes in order to help our workers deal with the effect of inflation,” Mr. Drilon said.

“If the salary hike that our workers have been asking the government to provide is not yet possible due to fiscal constraints, legislation that will increase workers’ net take-home pay is the best alternative we can work on.”

Emphasizing his department’s stand during the committee hearing yesterday, Finance Undersecretary Jeremias N. Paul, Jr. said lawmakers must take a “holistic approach” to tax reform, saying “there should be a revenue measure that will essentially plug the loophole” of about P40 billion from the raising of the bonus exemption cap alone. -- M. L. T. Lopez BusinessWorld

Rep. Raymond Mendoza as new Commission on Appointments (CA) member

NEW CA MEMBER: Senate President and Commission on Appointments (CA) chairman Franklin M. Drilon administer the oath of office to Trade Union Congress of the Philippines (TUCP) Party-List Representative Raymond Democrito Mendoza, Wednesday morning as a new member of the CA. Also in photo is Isabela First District Representative Rodolfo Albano III. (PRIB Photo by Joseph Vidal/3 September 2014)

TUCP tells Aquino: Lead from the front

THE largest labor organization in the country, the Trade Union Congress of the Philippines (TUCP), on Monday called on President Benigno Aquino 3rd to “lead from the front” and convene a “national summit for a jobs program” and a “national summit on power, water and public transport.”

“The TUCP believes that all sectors of society will rally behind the President once he takes the cudgels for the real issues that plague the country today: unemployment, the power crisis, the impending water crisis and the public transport breakdown,” TUCP Executive Director Luis Corral said.

According to him, “(t)he Left and their outworn ideological prescriptions are now outwearing the welcome and tolerance of those who simply want investments that create decent jobs and arguably the governance reforms of Aquino are creating such a window of opportunity.”

“In the same vein, there are those presuming to speak for the basic social sectors in advancing a narrative of succession in 2015, (with one) painting a false picture of the administration and the other is doing a disservice to the nation in distracting the President from the real problems he has to address in the last two years of his administration,” Corral said.

He added that Aquino’s “failure to take up these real problems, not the elite discourse on 2015 succession, will be the prelude to an economic meltdown and collapse of his social contract” with the people,” he added.

The TUCP pointed out that a recent Social Weather Stations survey on joblessness and the static 7.1 percent unemployment rate represent the true picture of how far economic inclusiveness still has to go, that the power crisis is having a chilling effect on locators and investors and may lead to a new round of job retrenchments.

It said even as clogged ports have led to some 20,000 workers being laid off, ordinary workers risk death and amputation everyday as they take the dilapidated Metro Rail Transit 3 train system daily.

Meanwhile, the TUCP accused the government of playing deaf to cries of the National Water and Resources Board that El Nino threatens the country’s water supply for drinking purposes, agricultural use and electricity generation.

TUCP spokesman Alan Tanjusay said the President is badly served by high officials preparing their golden parachutes or warming their chairs preparing for future electoral campaigns. - JING VILLAMENTE / Manila Times

TUCP: Real issues must be addressed

THE Trade Union Congress of the Philippines yesterday asked President Aquino to “lead from the front” and convene a national summit for a jobs program, on power, on water, and on public transport.

TUCP executive director Luis Corral said his group believes all sectors of society will rally behind Aquino if he addresses the “real issues” of unemployment, power crisis, impending water crisis, and “public transport breakdown.”

“It is the President who has a mandate. He has only to convene all groups so that they–and not the proxy poor, the proxy peasant and the proxy marginalized–can speak for themselves,” he said.

He said the leftist groups “and their outworn ideological prescriptions are now outwearing the welcome and tolerance of those who simply want investments that create decent jobs.”

“In the same vein there are those presuming to speak for the basic social sectors in advancing a narrative of succession in 2015,” Corral said.

Corral said the TUCP is appealing to Aquino not to be distracted.

“The divergence of political and economic goals heard from the left, the right and all points in between in the last few days shows that there are a mixed bag of opportunists, pretenders, and political engineers who are on the one hand trying to lead the country from behind and on the other hand, perennial ideological nitpickers trying to derail the political and economic gains of the last four years,” he said.

TUCP spokesperson Alan Tanjusay said a national summit on jobs and consumer issues will catalyze the silent majority who placed their trust in an Aquino presidency.

He said “assigning blame and politicking” are not what the silent majority is concerned about.

Corral said consultations on power ordered by the President in his state of the nation address last July have not brought ordinary consumers and workers on board.

“It appears to be a discourse of various Makati interest groups, who are elbowing each other out to promote their preferred gas turbines, power barges or interruptible load programs (ILP). It is again, and wrongly so, about how much will one group earns and what kind of price Juan dela Cruz will end up paying for both as taxpayer and consumer,” said Corral. - Malaya