Tax Exemptions on De Minimis Benefits Expanded

(PIA) — Labor and Employment Secretary Rosalinda Dimapilis-Baldoz said 2015 augurs well for the country’s millions of workers with the expansion by the government of the list of de minimis benefits to be exempted from income tax on compensation, to include benefits under collective bargaining agreements (CBAs) and productivity incentive schemes.

“This is a fitting gift to our workers in this holiday season,” Baldoz said in a statement, after the DOLE and the Department of Finance had agreed to have the measure take effect in January 2015.

“With this, millions of Filipino workers could welcome the new year with a more realistic hope of sharing in the country’s growing prosperity. That is what inclusive growth is,” she said.

She said the administration of President Benigno S. Aquino III recognizes the tangible contributions put in by millions of Filipino workers to the country’s growing economy, and expanding the list of tax-exempt de minimis benefits is a measured way to ensure each hard working Filipino is rewarded for his labors.

“This is the fruit of our workers’ constructive engagement with the Aquino III administration which from Day One has been committed to their welfare,” she said, adding:

“The Bureau of Internal Revenue, which is under the DOF, will issue new revenue regulations to make the measure effective.”

Citing data of the DOF, the labor and employment chief said the total amount of de minimis benefits that each worker-taxpayer can claim when the measure takes effect will reach P104, 225, up by P10,000 from the current level of P94, 225. The BIR revenue regulation on de minimis benefits was last amended in 2012.

Baldoz recalled that expanding the list of tax-exempt de minimis benefits was one of the demands of labor at the dialogue with the President in the last Labor Day commemoration in May 2014.

The expansion of the tax-exempt de minimis benefits is a direct result of exhaustive social dialogue between President Aquino III and various labor groups over the year.

Secretary of Finance Cesar V. Purisima had noted the balancing act of the government in approving the measure, saying the government believes in balanced proposals that augment the strength of our economy.

He noted that P16.9 billion in revenues is expected to be foregone once the BIR revenue regulation takes effect.

“We believe that the expansion of tax-exempt de minimis benefits is fairer and more equitable than other measures of tax relief benefiting only a small percentage of the working population. 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,” Secretary Purisima had said. (www.dole.gov.ph)