MANILA - European businessmen are concerned over a recent memorandum from the country's main tax agency saying healthcare benefits can be taxed.

The Bureau of Internal Revenue recently released a memo saying premiums paid by firms for their employees' health cards are part of employees' P90,000 tax-exempt threshold for 13th month pay and other benefits.

European Chamber of Commerce in the Philippines (ECCP) president Guenter Taus said this move by the BIR will be "very detrimental to people's incomes."

"You lower the income tax, but tax everything else. This doesn't seem to be the right approach," Taus said in an interview with ANC's Market Edge.

He added that healthcare coverage by government institutions was not enough to get people through serious illness, but a lot of people may opt out of their employer's group insurance policy if this means paying more taxes.