Angara urges BIR to scrap memorandum taxing health card premiums
Published Nov 25, 2018 01:36 pm
By Hannah Torregoza
Sen. Juan Edgardo “Sonny” Angara on Sunday urged the Bureau of Internal Revenue (BIR) to withdraw its revenue memorandum circular that would subject premiums on health cards to tax.
Senator Juan Edgardo “Sonny” Angara
(Sonny Angara Facebook page / MANILA BULLETIN) Angara is referring to Revenue Memorandum Circular (RMC) 50-2018 (A7) which provides that premiums on health cards paid by the employer for all employees shall be included as part of bonuses and benefits which are subject to the P90,000 tax-exempt threshold. The circular, in effect, reverses previous BIR ruling and regulations that premium on health cards shall be tax-free. According to the BIR, the RMC 50-2018 sought to clarify the implementing rules of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law. Angara said that instead of clarifying the revenue regulations, the RMC 50-2018 “created a confusion” as to the proper treatment of the premiums on health cards. He said nowhere in the tax reform law did it say that health maintenance cards or health card benefits would be subject to tax. “Kahit isa-isahin natin ang mga pahina ng RA 10963, hindi po natin makikita doon na dapat buwisan ang mga HMO o health card benefits (Even if we scrutinize each and every page of RA 10963, you cannot see any provision that HMOs would be subjected to tax),” Angara said in a statement. “Kaya’t nananawagan tayo sa BIR na klaruhin na agad ang isyu na ito at patuloy na ipatupad ang (That’s why we call on the BIR to clarify this issue and continue to implement) tax-free health benefits,” said Angara, chair of the Senate ways and means committee. A known advocate of free checkup and laboratory test for all Filipinos, Angara said the BIR should put into greater consideration the welfare of Filipinos who put a premium on their health. “Sa laki ng gastusin sa pagpapagamot at pagpapa-ospital, hindi makatao na bubuwisan pa ang mga benepisyo na nakatutulong nang malaki para pangalagaan ang kalusugan ng bawat pamilyang Pilipino, (With the high cost of medicine and hospitalization, it is unfair to tax even these little benefits that can greatly impact the health of every Filipino family),” he added. The senator said it is crucial for the BIR to clear up the regulation at once as employers are set to release the 13th month pay and Christmas bonuses of their employees in the coming weeks. Beginning this year, pursuant to RA 10963, the 13th month pay and other benefits, including productivity incentives and Christmas bonuses, are exempted from tax if they do not exceed P90,000. It was Angara who helped expedite the law that raised the tax exemption cap of 13th month pay and other benefits from P30,000 to P82,000 in 2015. The lawmaker stressed that health premiums should not be included in the computation of taxable bonuses and benefits. “Tinaasan nga natin ang tax-free bonus para buong-buo itong maiuwi sa pamilya. Huwag naman po sana dayain ito dahil umaasa na ang publiko na mas malaking bonus na ang kanilang makukuha (we raised the tax-free bonus so that workers can bring this home to their families. Please don’t tweak this provision because a lot of our fellowmen are expecting to get higher bonuses this time),” Angara said.
Senator Juan Edgardo “Sonny” Angara(Sonny Angara Facebook page / MANILA BULLETIN) Angara is referring to Revenue Memorandum Circular (RMC) 50-2018 (A7) which provides that premiums on health cards paid by the employer for all employees shall be included as part of bonuses and benefits which are subject to the P90,000 tax-exempt threshold. The circular, in effect, reverses previous BIR ruling and regulations that premium on health cards shall be tax-free. According to the BIR, the RMC 50-2018 sought to clarify the implementing rules of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law. Angara said that instead of clarifying the revenue regulations, the RMC 50-2018 “created a confusion” as to the proper treatment of the premiums on health cards. He said nowhere in the tax reform law did it say that health maintenance cards or health card benefits would be subject to tax. “Kahit isa-isahin natin ang mga pahina ng RA 10963, hindi po natin makikita doon na dapat buwisan ang mga HMO o health card benefits (Even if we scrutinize each and every page of RA 10963, you cannot see any provision that HMOs would be subjected to tax),” Angara said in a statement. “Kaya’t nananawagan tayo sa BIR na klaruhin na agad ang isyu na ito at patuloy na ipatupad ang (That’s why we call on the BIR to clarify this issue and continue to implement) tax-free health benefits,” said Angara, chair of the Senate ways and means committee. A known advocate of free checkup and laboratory test for all Filipinos, Angara said the BIR should put into greater consideration the welfare of Filipinos who put a premium on their health. “Sa laki ng gastusin sa pagpapagamot at pagpapa-ospital, hindi makatao na bubuwisan pa ang mga benepisyo na nakatutulong nang malaki para pangalagaan ang kalusugan ng bawat pamilyang Pilipino, (With the high cost of medicine and hospitalization, it is unfair to tax even these little benefits that can greatly impact the health of every Filipino family),” he added. The senator said it is crucial for the BIR to clear up the regulation at once as employers are set to release the 13th month pay and Christmas bonuses of their employees in the coming weeks. Beginning this year, pursuant to RA 10963, the 13th month pay and other benefits, including productivity incentives and Christmas bonuses, are exempted from tax if they do not exceed P90,000. It was Angara who helped expedite the law that raised the tax exemption cap of 13th month pay and other benefits from P30,000 to P82,000 in 2015. The lawmaker stressed that health premiums should not be included in the computation of taxable bonuses and benefits. “Tinaasan nga natin ang tax-free bonus para buong-buo itong maiuwi sa pamilya. Huwag naman po sana dayain ito dahil umaasa na ang publiko na mas malaking bonus na ang kanilang makukuha (we raised the tax-free bonus so that workers can bring this home to their families. Please don’t tweak this provision because a lot of our fellowmen are expecting to get higher bonuses this time),” Angara said.