THE DEPARTMENT of Finance (DOF) and the Bureau of Internal Revenue (BIR) have sought higher ceilings for tax-exempt benefits for the workers in the public and private sectors, in order to achieve inclusive growth and social protection for Filipino families.
The DOF said they are proposing to raise the tax-exempt ceiling when it comes to monetized and unused vacation leave credits for private employees to 12 days from the current 10.
The uncapped benefit for a government employees’ monetized vacation and sick leaves, meanwhile, would stay the same.
DOF also proposed a limit for medical cash allowances for dependents to P2,000 per semester from the current P1,500. Rice subsidies, meanwhile, will be at P2,500 monthly or its market equivalent from the current P2,000.
The agency also seeks a P1,000 increase on the non-taxable threshold for uniform and clothing allowance or from P7,000 to P8,000 yearly.
DOF also proposed the following adjustments for a higher ceiling on the following:
* Actual medical assistance to P12,000 annually (from the current P10,000)
* Laundry allowance to P400 monthly (from the current P300)
* Employee achievement awards to P12,000 annually (from the current P10,000 – Christmas or anniversary gifts to P6,000 annually (from the current P5,000)
Meanwhile, DOF said the tax-free limit on meal allowances for overtime or night-shift employees should be raised from 25 percent to 30 percent of the minimum wage.
A combined ceiling for collective bargaining agreement and productivity incentives will be adjusted from P10,000 to P12,000 annually.
In its release, DOF said this proposal would allow workers in the private and government sectors to “enjoy higher non-taxable allowances and benefits to account for inflation and rising living costs.”
This will also “enhance competitiveness across sectors, while maintaining prudent fiscal management,” according to the DOF.
Finance Secretary Ralph Recto ordered BIR to look at other possible exemptions for other taxpayer segments from the obligation to withhold and remit creditable withholding taxes.
DOF and BIR were also looking at other matters to “simplify and lower the applicable withholding tax rates to reduce compliance costs” for taxpayers.
“Lagi po nating hangarin na mapagaan ang pasanin ng mga taxpayers. Sa proposal na ito, gusto nating maramdaman talaga ng taumbayan ang ginhawa dahil mas lalaki ang maiuuwi nilang kita at matutulungan nitong maibsan ang gastusin nila sa araw-araw,” said Rectom.
“These increases will have minimal impact on the government revenues but will definitely make a significant difference for our workers,” he added.
During his speech before flying to Kuala Lumpur, Malaysia, President Ferdinand Marcos, Jr. said this move wants to help taxpayers already “burdened by complex tax compliance requirements without revenues to be foregone.”
“These changes are not just about numbers — they are about fairness and dignity in the workplace. Every Filipino worker deserves to benefit from the nation’s growth,” Marcos Jr said. (ABS-CBN News)
