Senatorial candidate and Makati Mayor Abby Binay has renewed her commitment to advocating for the tax exemption of overtime pay and bonuses like the 13th month pay to promote financial security among government and private sector workers and their families.
Binay said she will actively pursue the amendment of the tax code in the Senate to reclassify overtime pay and bonuses as “non-taxable income” to help workers cope with rising inflation and cost of living.
“Exempting minimum wage earners from income tax is not enough. Moreover, the current non-taxable income rates are no longer realistic given the present economic conditions in the country,” Binay said.
The Tax Reform for Acceleration and Inclusion (TRAIN) Law or Republic Act No. 10963 has set the threshold for non-taxable income at P20,833 per month or P250,000 per year. The law also excludes the 13th month pay and other bonuses up to P90,000 from the taxable income, and any excess is included in the computation of taxable income for the applicable tax year.
“Workers deserve to enjoy their overtime pay and bonuses in full. It is but fair to fully compensate their hard work and extended hours of working which cut into their supposed rest period and family time,” Binay said.
The senatorial aspirant said that excluding overtime pay from the computation of taxable income will increase the takehome pay of workers.
“If they receive their OT pay in full, they will have more disposable income to spend for the basic needs of their families like food, clothing, shelter, water, and electricity. They will also be able to cover other day-to-day expenses of family members like transportation in going to and from work and school,” Binay said.
Additionally, making the 13th month pay and other bonuses tax-exempt will enable Filipino families to fully experience the joys of Christmas and welcome the New Year with hope and cheer, the mayor said.
“Mas magiging masaya ang Pasko para sa bawat pamilyang Pilipino kapag buong-buong natatanggap ang mga yearend bonus. Malamang ay makakabayad din sila kahit papaano sa mga utang, at magiging mas masaya ang pagsalubong nila sa Bagong Taon,” Binay said.
She said that the bigger takehome pay and bonuses will stimulate consumer spending and translate to brisk business sales and higher revenue collection for the government.
“Mababawi rin ang nabawasang kita ng gobyerno mula sa buwis dahil mas lalakas ang purchasing power ng mga mamamayan,” Binay said.
She also said that the government can continue to expand its revenue base by intensifying efforts to strengthen the tourism industry, capitalizing on the country’s natural wonders and the warm hospitality of its people.
“We have so many resources yet to be fully tapped for revenue generation. Let us focus on them so that over 50 million Filipino workers, including minimum wage earners and ordinary employees, will not have to bear onerous taxes and be able to provide a decent life for their families,” Binay said.
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