It is an understatement that the cost of living goes up every year. In fact, costs of gasoline, electricity, water, rentals and basic commodities rise every few months. Not to mention the allowable 10 percent tuition fee increase annually. “Yet income remains constant and increases only after a few years. Worse, tax impositions necessarily diminish take home pay of employees, both in the public and the private sector. This is without mentioning automatic tax deductions such as the value added tax which are essentially paid whenever we avail of goods and services,” Bohol First District Rep. Rene L. Relampagos has said. Republic Act No. 8424, or the National Internal Revenue Code (NIRC) of 1997 lists taxable income as well as allowable tax exemptions. Among the exemptions are bonuses not exceeding P30,000. When the NIRC was passed in 1997, employees in the public sector enjoying the P30,000 salary were classified under salary grade 28 positions or who were then occupying Assistant Secretary positions and higher. To date, they receive additional allowances not enjoyed by regular employees.

With the passage of the Salary Standardization Law or Joint Congressional Resolution No. 4 last June 17, 2009 and fully implemented in 2012, however, the salary of P30,000.00 are now received by employees occupying salary grade 18 positions. Salary Grade 18 employees are classified as administrative officers or employees. Also, under the Salary Standardization Law, salary grade 28 is now pegged at P67,684. “Simply, when the NIRC was passed in 1997, the statutory intent was to tax those classified as salary grade 28 and higher. However, with the current change in the salary schedule in view of the Salary Standardization Law implemented in 2012 and justified by the reality of increase in the cost of living, the NIRC should likewise be amended to be consistent with the legislative intent of the law when it was passed 17 years ago. Otherwise, we will be subjecting to tax those employees whose bonuses and benefits were not previously envisioned to be taxed by law,” Relampagos said. If passed, the law will correct the impractical and unanticipated result in the application of the NIRC to employees who are classified as salary grade 18 positions which is a far-cry from the original spirit of the tax law. That lawmaker said that, “In the proposed bill, we will seek to change the allowable exemption cap under the NIRC from P30,000 to seventy thousand pesos P70,000 to all bonuses and benefits received by employees and workers – whether in the public or the private sector.” “While we will ultimately continue to work for the increase of salary of employees, the present proposal to correct the application of the NIRC will help in reducing the gap between salary of employees and workers in relation to the increasing cost of living of the day. We will be filing the appropriate bill next week,” Relampagos said.