Philippines – Another mark on the history of Philippine Taxes is the amendment of Section 32(B)(7)(E) of the National Internal Revenue Code (NIRC) of 1997 where the former statutory allowance of Thirty Thousand Pesos (P 30,000.00) was increased to Eighty Two Thousand Pesos (P 82,000.00). The effectivity of the amendment shall apply for the calendar year 2015. The amendment of the NIRC Section 32 (B)(7)(E) is as follows:

Exclusions from Gross Income – Miscellaneous Items – 13th Month Pay and Other Benefits – NIRC – Sec. 32 (B ) (7 ) (e)– Gross benefits received by officials and employees of public and private entities: Provided, however, that the total exclusion under this sub-paragraph shall not exceed Thirty thousand pesos (P30,000) Eighty Two Thousand Pesos (P82,000) which shall cover:

(i) Benefits received by officials and employees of the national and local government pursuant to Republic Act No. 6686;

(ii) Benefits received by employees pursuant to Presidential Decree No. 851, as amended by Memorandum Order No. 28, dated August 13, 1986;

(iii) Benefits received by officials and employees NOT covered by Presidential Decree No. 851, as amended by  Memorandum Order No. 28, dated August 13, 1986; and

(iv) Other benefits such as productivity incentives and Christmas bonus: Provided further, That the ceiling of Thirty Thousand Pesos (P30,000) Eighty Two Thousand Pesos (P82,000) may be increased through rules and regulations issued by the Secretary of Finance, upon recommendation of the Commissioner, after considering, among others, the effect on the same of the inflation rate at the end of the taxable year.

The related news in the Philippine publication, inquirer, also discussed about how it became a law. The long-awaited result of the discussions with the legislative branch as against the disagreement of the tax authorities (BIR) and the Dept. of Finance has now come to take place and will take effect this Calendar Year 2015.

Although the effect of this amendment in the Tax Code cannot be felt by the workers in the low-income bracket, the Employers should still make an effective alignment on how to help their employees enjoy the benefit of the increased statutory allowance limit.

Author

  • Greg V. Aquino is a Certified Public Accountant engaged in Public Practice since the year 2010. He is the managing partner of Clemente Aquino & Co., CPAs since the year 2013. Sector experience includes food & franchise company; real estate; distributorship; gasoline dealership; PEZA companies; BPOs; and non-profit organizations. He can handle individual tax planning; corporate tax planning; estate planning; transfers of real and personal properties; setup of a corporation, partnership, one-person corporation, and sole proprietorships; local government taxation; corporate housekeeping; resident agent services; corporate secretariat; fs preparation or compilation; fs reconstruction; fs audit; internal audit; and others.

%d bloggers like this: