Philippines scraps proposed tax on health cover premiums

Public outrage causes tax bureau to backtrack

Philippines scraps proposed tax on health cover premiums

Insurance News

By Gabriel Olano

Employees in the Philippines will no longer have to pay tax on their group health insurance premiums after the country’s tax authority recalled its earlier order following criticism from several sectors.

A previous circular from the Bureau of Internal Revenue (BIR) stated that the premiums on group health insurance paid by employers will be considered as employment benefits that are part of the PHP90,000 (US$1,700) threshold for annual personal tax exemption, Rappler reported.

Senator Sonny Angara had earlier criticised the BIR for “creating confusion”. The legislator pointed out that the bureau would be violating a law that exempts group health insurance premiums from taxation. He called on the bureau to clarify the issue and continue to consider health insurance as a tax-free benefit.

In response to the BIR’s rolling back of the tax, the labour union Federation of Free Workers (FFW) said that “the vigilance of union leaders paid off.”

“This change of heart by the BIR might have just saved Christmas for many of our hardworking employees,” said FFW president Sonny Matula. “Had workers not raised a howl of protest, this unjust tax imposition would have been unilaterally implemented without a fight.”

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