MANILA -- Senate President Franklin Drilon on Wednesday said both houses of Congress have agreed to prioritize the passing of the bill increasing the tax exemption limit imposed by an outdated law regarding the 13th month pay, Christmas bonus and other work benefits.
Drilon said both houses will attempt to pass the bill before they go on Lenten break on March 15.
"We will have hearings on this but it is in the priority agenda of both houses," he said.
Senate Bill No. 256, authored by Senate Pro-Tempore Ralph Recto, intends to raise the exclusion limit on an individual's 13th month pay, Christmas bonus, and other work benefits from income taxation from the current imposed limit of P30,000 to P75,000.
According to Drilon, both chambers are aware of the need to revisit the antiquated provisions of the law to provide relief to state and private workers whose purchasing power has been shrinking for years due to inflation, but still have had to deal with the consequences of an outdated law.
He was referring to Republic Act No. 7833, or the statute that imposed the P30,000 cap on bonuses back in 1994 when the lowest monthly basic salary for government employees (Salary Grade 1, Step 1) was tagged at P2,800, while the President of the Philippines (Salary Grade 33) received P25,000 per month.
Today, the basic salary for government employees is pegged at P9,000, with the highest salary reaches P120,000 per month.
"Yung sinasabing losses (in taxes) is more theoretical. Yes, there may be losses but whatever taxes not paid, gagastusin din yun sa Pasko so babalik din sa ekonomiya," Drilon said.