BIR to Impose Taxes on 13th-Month Pay Exceeding P30,000

The Bureau of Internal Revenue Commissioner Kim Henares clarified on Thursday, Deceember 12, 2013, that the law that taxes benefits and perks, including the 13th-month pay exceeding P30,000, is applied to all Philippine employees in a report by Inquirer.net.

BIR Kim Henares

The BIR Commissioner made the clarification in response to the pronouncement made by the Confederations for Recognition and Advancement of Government Employees (Courage) decrying the BIR’s memorandum circular stating that benefits obtained by the unions of all state workers under the Collective Negotiations Agreement (CNA) were also subject to taxes if these exceeded P30,000 when combined with other perks.

According to Commissioner Kim Henares, under the law, benefits and perks amounting to P30,000 are exempted from taxes but if it exceeds more than P30,000 then the BIR will collect taxes to them.

During an interview at the Department of Justice, Commissioner Henares was quoted as saying “I want to make it clear that the law (Tax Code) is implemented across-the-board, to all workers—government employees, private employees, whether union or non-union employees,” she said.

The BIR Chief added further that the taxes are applied to all government employees whether they are under the executive, legislative, judiciary and constitutional commissions, as stated by the BIR Commissioner.

BIR also issued a reminder for all heads of agencies and their accountants in both government and private sector to observe the tax rule or they could be held criminally liable under the Philippine law.

1 thought on “BIR to Impose Taxes on 13th-Month Pay Exceeding P30,000”

  1. BIR Commissioner Kim Henares refused to either enforce collection of deficiency tax of P1.5 billion still due from GOLDEN DONUTS, INC. (GDI), Dunkin’ Donuts’ local seller or sue the company for fraud for under-declaring its revenues in the income tax return. (The Manila Times, December 11, 2013, “WHO IS AFRAID OF DUNKIN’ DONUTS?” by Emeterio Perez).

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