BIR removes health premium tax

Good news for employees! BIR has removed the health premium tax.

BIR Commisioner Cesar Dulay  said that after doing a review, they are deleting the provision.

the implementation of the pertinent provisions under RMC 50-2018 relative to the group health insurance premiums and director’s fees which were not affected by the provisions of the TRAIN law are hereby deleted from RMC 50-2018“.

Recently, the Bureau of Internal Revenue earned criticisms when memorandum circular (RMC 50-2018) affected the 13th month pay of many employees. The memorandum stated that amount of health card premiums paid by employers were included in the computation of the P90,000 tax-exemption.

According to the memo –“Any amount in excess of the P90,000 shall be subject to income tax, and consequently to the withholding tax on compensation,”.

Senators namely- Senator Sonny Angara , Senator Chiz Escudero and  Senate President Pro Tempore Ralph Recto expressed that they disagree with BIR’s implementation of tax on health premiums. (Read: Senators disagree with BIR health premiums tax).

Senator Angara stated that a hearing could’ve been conducted if BIR did not take back its memo.

 

 

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