BIR 'deletes' tax on health card premiums amid flak


Posted at Nov 29 2018 10:08 PM | Updated as of Nov 29 2018 10:44 PM

MANILA - The Bureau of Internal Revenue has taken back its controversial statement that health card premiums can be taxed.

The BIR issued a memorandum circular (RMC 50-2018) on May 11 saying health card premiums paid by employers were included in the P90,000 tax-free privilege on employee benefits and bonuses.

"Any amount in excess of the P90,000 shall be subject to income tax, and consequently to the withholding tax on compensation," the memo said.

But in another memorandum dated Nov. 26, BIR Commisioner Cesar Dulay said after reviewing the earlier order, it was now removing these provisions.

The BIR said "the implementation of the pertinent provisions under RMC 50-2018 relative to the group health insurance premiums and director's fees which were not affected by the provisions of the TRAIN law are hereby deleted from RMC 50-2018."

Lawmakers and labor groups have questioned the inclusion of health care premiums in the computation of taxable income.

Senator Sonny Angara said earlier this week that the Senate would conduct a hearing on the issue if the BIR did not recall its memo.

“Tinaasan nga natin ang tax-free bonus para buong-buo itong maiuwi sa pamilya. Huwag naman po sana dayain ito dahil umaasa na ang publiko na mas malaking bonus na ang kanilang makukuha,” Angara said in a statement.