The House Committee on Ways and Means is considering a proposal to raise the tax-exempt cap on 13th-month pay and other benefits, alongside a broader review to expand the tax-free income threshold for workers.
Marikina City 2nd District Representative Miro Quimbo, who chairs the panel, announced that lawmakers aim to lift the non-taxable ceiling for 13th-month pay and additional employee perks from ₱90,000 to ₱120,000.
“Dalawang kahon ang ating pinanggagalingan na sahod na tina-tax. Yung unang kahon ay general gross salary at yung pangalawang kahon na may tax exemption ay total amount of 13th to 14th month additional salary na wala sa gross salary mo, itataas din ‘yun from ₱90,000 to ₱120,000,” Quimbo said.
This initiative follows a push from President Ferdinand Marcos Jr. encouraging Congress to raise the baseline annual income tax exemption from ₱250,000 to ₱350,000.
While some labor groups advocate for an even higher limit of ₱500,000, Quimbo highlighted that such recommendations often overlook the separate exemptions granted for bonus benefits.
“Lahat yan titingnan natin kasi yung ₱500,000 na ibang proposal, hindi pa nila tine-take into consideration yung additional deductions or exemptions for 13th-month pay,” he explained.
“In reality, more than ₱350,000 and magiging benepisyo ng ating mga kababayan,” he added.
The panel plans to begin its deliberations next week, starting with a briefing from the Department of Finance (DOF) to analyze the anticipated revenue impact on government coffers. Subsequent sessions will engage key stakeholders, including labor unions, business owners, tax professionals, civil society groups, and academic experts.
“Ang timetable namin is to have three hearings on the matter,” the lawmaker stated. “First is to listen to the DOF relative to the changes (to see) what is going to be the revenue impact.”
“Pangalawa, kailangang mapakinggan natin ang sectors that will be affected or will benefit from it… And then thirdly, kailangan natin mapakinggan ang academe para makita natin kung ‘yung objective ba natin dito ay matutupad,” he added.
Quimbo assured that the committee’s objective is to craft balanced tax relief policies that deliver genuine relief to workers while ensuring target beneficiaries directly feel the financial gains.