THE BUREAU of Internal Revenue (BIR) said it is reviewing the taxability of health insurance premiums, with a decision possibly released within the week.
Deputy Commissioner Marissa O. Cabreros said that the BIR was reviewing the measure even before it was raised by Senator Juan Edgardo M. Angara on Sunday.
“There’s a workaround to be done, (which is) to issue a clarification. I can not discuss it right now, but within the week we’ll come out with something to clarify the issue for the taxpayers, since they are affected,” she told reporters in a chance interview on Tuesday.
“We will issue a statement,” she added.
The concern stemmed from BIR Revenue Memorandum Circular 50-2018 BIR containing frequently asked questions on the implementation of income and withholding tax provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) law. It states that premiums paid by employers to health maintenance organizations (HMO) are included in the P90,000 tax-exempt threshold of bonuses together with the 13th month pay.
Total bonuses exceeding the threshold will be taxed a 35% fringe benefits tax, which was increased from 32% before the TRAIN law was implemented.
Mr. Angara said that the BIR violates a 1998 Revenue Regulation stating that health card premiums are not taxable, and should not be included in the computation of gross bonuses to be subject to the tax-exempt threshold.
“Many are asking about that. But even before it was raised, we were studying it,” Ms. Cabreros said. — Elijah Joseph C. Tubayan
