Makati City Mayor and senatorial aspirant Abigail Binay on Thursday announced her plan to advocate for tax exemptions on the 13th month and overtime pays of workers in both the private and public sectors.
These tax exemptions, she said, would provide significant relief to workers and their families by increasing their disposable income, which they can use for basic necessities.
“Exempting overtime pay and the 13th month from taxes will boost the disposable income of workers, allowing them to purchase food and medicine, provide allowances for children in school, and meet other essential needs,” she stated.
Binay also highlighted the long-term economic benefits of such exemptions.
“It will create a domino effect. Increased consumer spending will drive sales and foster business growth, which, in turn, will lead to higher revenue collection for the government. Any revenue loss from these exemptions will be offset,” she explained.
Furthermore, the mayor noted that completely exempting overtime pay and the 13th month from taxable income would aid Filipino families in the low to middle-income brackets in coping with rising inflation.
“Reducing the tax burden on workers will help Filipino families, particularly those in the low to middle-income sectors, avoid falling deeper into poverty amid escalating inflation,” she added.
Currently, the Tax Code sets a cap of P90,000 on the total amount of the 13th month pay and other additional benefits, such as the 14th month and performance bonuses, to be considered non-taxable income. Any amount exceeding P90,000 is classified as taxable income.