SENATORS are seeking tax exemptions for bonuses up to P150,000 and micro, small, and medium enterprises (MSMEs) for up to three years.
Sen. Sherwin Gatchalian is pushing what he calls the Ginhawa Act, which seeks to expand the coverage of tax exemption to those making P400,000 annually. He also wants a larger tax exemption coverage for bonuses.
“So ibig sabihin ‘pag kumikita ka ng P400,000 a year, exempted ka from income tax. Tapos ‘yung mga bonuses ngayon, ‘pag ang bonus mo ay P90,000 a year, exempted ka,” Gatchalian said.
He also seeks to exempt service charges from income tax, among others.
“Kasi ‘yung service charge natin, equivalent to tips. So, ang tips naman, ay kusang loob ‘yan na binibigay sa mga waiters. So, ang proposal rin namin, tatanggalin ‘yung income tax on service charge,” the senator said.
Gatchalian also seeks to extend tax exemption for night differential, overtime pay and holiday pay to those earning more than the minimum wage.
Senate President Francis Escudero, meanwhile, wants to exempt MSMEs from the income tax for three years and deduct from their taxable income an amount equivalent to 25 percent of their labor expenses. He is also proposing to slash the optional tax on gross sales or receipts to 5 percent from the current 8 percent.
Escudero also wants to streamline the rates under the creditable withholding tax system to two, namely, 1 percent for the purchase of goods and properties, and 2 percent for the purchase of services.
He is also calling for the reinstitution of the mandatory credit allocation for MSMEs by all lending institutions for a period of 10 years in order to provide small businesses with better access to financing.
“These will allow our MSMEs, particularly those that are struggling financially, to continue their operations, hire more people and even consider an expansion in the future,” Escudero said. (ABS-CBN News)
