BIR urged: Withdraw memo taxing health card premiums

SENATOR Sonny Angara called on the Bureau of Internal Revenue (BIR) to withdraw its revenue memorandum circular which states that health card premiums shall be subject to tax.

Angara, who chairs the Senate committee on ways and means, explained that under Revenue Memorandum Circular (RMC) 50-2018 (A7), premiums on health cards paid by employers for employees shall be included as part of bonuses and benefits which are subject to the P90,000 tax-exempt threshold.

With this, the senator pointed out that the said circular reverses the previous BIR ruling and regulations that health card premiums shall be tax-free.

The BIR has stated that the RMC 50-2018 aimed to clarify the implementing rules of Republic Act 10963, but the senator believes 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.

“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. Kaya’t nananawagan tayo sa BIR na klaruhin na agad ang isyu na ito at patuloy na ipatupad ang tax-free health benefits,” he said.

(We’ve read all the pages of RA 10963, and we cannot find anything there that states that HMOs or health card benefits should be taxed. So we call on the BIR to immediately clarify this issue and continue to implement tax-free health benefits.)

“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,” he added.

(With the huge expenses associated with medical treatment and hospitalization, it is not human to tax benefits that can be used to protect the health of every Filipino family.)

Hence, Angara said it is “crucial” for the BIR to “clear up the regulation at once.”

Employers are set to release the 13th-month pay and Christmas bonuses to their employees in the coming weeks.

Beginning this year, under RA 10963, benefits which include the 13th-month pay, productivity incentives, and Christmas bonuses are exempted from tax if they do not exceed P90,000.

Angara stressed that health card premiums should not be added in the computation of taxable bonuses and benefits.