As a financial relief, support in the midst of crisis
NANCY PUSHES FOR TAX-FREE BENEFITS FOR RETIREES IN BAYANIHAN 2

Senator Nancy Binay expressed her gratitude to the bicameral conference committee of the "Bayanihan to Recover as One Act", or Bayanihan 2, for ensuring that the retirement benefits of employees would be tax-exempt.

Binay pushed for the inclusion of a clause in Bayanihan 2 exempting tax-free retirement benefits for employees who have retired from private companies from June 5 until December 31 this year, which the Senate ratified on Thursday.

The measure provides for a P165-billion fund for the country's Covid-19 response and recovery plan.

"Sa totoo lang kawawa yung mga pinag-force retire o yung mga nag-avail ng optional retirement packages ng mga kompanya--wala nang trabahong babalikan, aawasin pa ang tax sa konting natira sa benefits nila," Binay said.

Section 5 of the approved measure states, "Retirement benefits received by officials and employees of private firms, whether individual or corporate, from June 5, 2020 until December 31, 2020 shall be excluded from gross income and shall be exempt from taxation: PROVIDED, That any re-employment of such official or employee in the same firm, within the succeeding 12-month period, shall be considered as proof of non-retirement and shall subject the benefits received to appropriate taxes. In addition to the payment of appropriate taxes, any person who willfully evades or defeats any imposable tax under this section shall be criminally liable and penalized under Sec. 255 of Republic Act No. 8424, as amended."

Under the present Tax Code, retirement benefits are only tax-exempt if they satisfy certain conditions of length of service and age.

"Gusto lang natin masiguro na all bases are covered sa Bayanihan 2. We want more people to benefit from this law since the pandemic has hit everybody," Binay said.

Only retirees who have been in the service of the same company for at least 10 years and not less than 50 years of age upon retirement qualify for tax exemption.

"Anumang revenue ang mawawala sa pamahalaan dahil sa tax exemption na ito, mababawi rin naman dahil sa value-added tax ng mga binibili. Ang mahalaga, mabigyan natin sila ng dagdag na panggastos para sa kapakanan ng mga pamilya nila," she added.

The senator said that by getting rid of the said conditions, retirees would have more money to dispose of amid the pandemic's uncertainty.

"Malaking bagay yung tax exemption sa retirees. Ang ibig sabihin nito, ang ikakaltas sana sa benefits ng mga kababayan nating magre-retire sa kasagsagan ng pandemya, magagamit nila para sa gastusin ng kanilang mga pamilya," Binay said.