THE House committee on ways and means yesterday approved a bill giving a 25 percent personal income tax discount to COVID-19 medical frontliners for all incomes earned in the line of duty.
The panel approved in principle a substitute bill to House Bill No. 7351 because lawmakers do not want to tax hazard pays and other allowances earned by the frontliners from the COVID-19 pandemic.
“The 25 percent discount will likely cover the taxes they would have owed on their COVID-19 allowances. That was the state’s attempt to compensate them for their service. Let me be clear: I do not want the government to tax their heroism,” said panel chair Albay Rep. Joey Salceda.
The original proposal, a full tax exemption, would mean a P9-billion loss for the government, according to a position paper sent by the Department of Finance, and this is why Nueva Ecija Rep. Estrellita Suansing proposed a 25 percent discount as a compromise.
The exemption granted in this proposal will cover only the salary or compensation, as well as the gross receipts from the exercise of profession or employment received by a frontliners for taxable year 2020.
The exemption will not cover income received by medical frontliners from their other businesses, investments and other kinds of passive income not related to serving, treating caring, aiding, assisting COVID-19 patients
To help frontliners file their income taxes on time given the potential changes in their tax calculations, the Department of Finance will also be given the authority to extend tax filing by six months.