Makati City Mayor and senatorial aspirant Abby Binay on Thursday, May 1, renewed her call to tax exempt overtime pay and bonuses like the 13th month pay, to promote financial security among government and private sector workers and their families.

In a statement, Binay said she will actively pursue the amendment of the tax code in the Senate to reclassify overtime pay and bonuses as “non-taxable income” to help workers cope with rising inflation and cost of living.

“Exempting minimum wage earners from income tax is not enough. Moreover, the current non-taxable income rates are no longer realistic given the present economic conditions in the country,” she explained.

The Tax Reform for Acceleration and Inclusion (TRAIN) Law or Republic Act No. 10963 has set the threshold for non-taxable income at P20,833 per month or P250,000 per year.

The law also excludes the 13th month pay and other bonuses up to P90,000 from the taxable income, and any excess is included in the computation of taxable income for the applicable tax year.

“Workers deserve to enjoy their overtime pay and bonuses in full. It is but fair to fully compensate their hard work and extended hours of working which cut into their supposed rest period and family time,” the mayor said, adding that excluding overtime pay from the computation of taxable income will increase the take home pay of workers.

“If they receive their OT pay in full, they will have more disposable income to spend for the basic needs of their families like food, clothing, shelter, water, and electricity. They will also be able to cover other day-to-day expenses of family members like transportation in going to and from work and school,” she stressed.

Binay noted that the bigger take home pay and bonuses will stimulate consumer spending and translate to brisk business sales and higher revenue collection for the government.

“Mababawi rin ang nabawasang kita ng gobyerno mula sa buwis dahil mas lalakas ang purchasing power ng mga mamamayan (The government's reduced tax revenue will also be recovered because the purchasing power of the citizens will be stronger),” Binay said.

To continue to expand its revenue base, Binay said the government should intensify its efforts to strengthen the tourism industry, capitalizing on the country’s natural wonders and the warm hospitality of its people.

“We have so many resources yet to be fully tapped for revenue generation. Let us focus on them so that over 50 million Filipino workers, including minimum wage earners and ordinary employees, will not have to bear onerous taxes and be able to provide a decent life for their families,” Binay said.