The Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) are moving to raise the ceilings on various tax-exempt or de minimis benefits for both private- and public-sector workers in the Philippines.
Key changes under consideration include:
- The monetized unused vacation leave credit ceiling for private employees may increase from 10 to 12 days.
- Medical cash allowances for dependents may go from ₱1,500 to ₱2,000 per semester.
- Rice subsidy benefits may be bumped from ₱2,000 to ₱2,500 per month (or equivalent market value).
- The annual non-taxable uniform and clothing allowance might increase from ₱7,000 to ₱8,000.
- Other adjustments include raising the ceiling for medical assistance from ₱10,000 to ₱12,000 per year, laundry allowance from ₱300 to ₱400 per month, employee achievement awards from ₱10,000 to ₱12,000 per year, and Christmas/anniversary gift limits from ₱5,000 to ₱6,000 per year.
- The tax-free limit for meal allowance for overtime or night-shift work is proposed to increase from 25 % to 30 % of the minimum wage.
- The combined ceiling for benefits under collective bargaining agreements (CBA) and productivity incentives may rise from ₱10,000 to ₱12,000 annually.
Finance Secretary Ralph G. Recto emphasized that these changes are intended to ease the burden on Filipino taxpayers and ensure workers “feel the benefit of the nation’s growth.”
Additionally, the BIR has been instructed to explore possible exemptions for certain taxpayer segments from withholding and remittance obligations and to consider simplifying and lowering applicable withholding tax rates to reduce compliance costs.
Overall, the DOF says these moves should have minimal impact on government revenues but provide significant relief and fairness for workers.