Workers to get additional tax exemption on fringe benefits

ABS-CBN News

Posted at Dec 28 2014 06:10 PM | Updated as of Dec 29 2014 02:10 AM

MANILA - Beginning January, worker-taxpayers will be able to enjoy an additional P10,000 tax exemption on their de minimis or fringe benefits.

According to payrollhero.ph, the de minimis benefits “are those benefits of relatively small values given by employers to their employees on top of the compensation and these benefits are not subject to withholding (tax exempt).”

The expanded list will cover benefits under collective bargaining agreements and productivity-incentive schemes, Communications Secretary Herminio Coloma, Jr. told radio dzRB.

Currently, fringe benefits include 10 days monetized vacation leaves that were not used; rice allowance not exceeding P1,500; flowers or fruits or other items given under special circumstances such as illness, marriage, birth; and medical benefits not exceeding P10,000, among others.

“Tinatayang aabot sa P104,225 ang total na mga benepisyong magiging tax-exempt[ed] mula sa kasalukuyang P94,225,” Coloma said.

The Bureau of Internal Revenue will issue the guidelines next year.

In an earlier press release, Labor Secretary Rosalinda Baldoz said: “This is the fruit of our workers’ constructive engagement with the Aquino III administration which from Day One has been committed to their welfare.”

The expanded list of tax-exempt fringe benefits was discussed during the Labor Day celebrations.

Finance Secretary Cesar Purisima said the new revenue regulation is “fairer and more equitable” than other tax relief measures.

“This measure directly impacts the working poor and the smallest income earners, who stand to have the most to gain from these benefits. We came to this agreement after a thorough consideration: we think this is a win for all Filipinos,” he said.

He said the tax relief will result in foregone revenues of up to P16.9 billion.