BIR: Premium on health cards tax-free

The Bureau of Internal Revenue (BIR) said that the premium on health cards shouldered by employers is exempted from withholding tax.

Individual premiums, not part of group insurance, paid for selected managers and supervisors are also not subject to fringe benefit tax.

The BIR issued the clarification in Revenue Memorandum Circular (RMC) No. 96-2018 that corrected an earlier RMC imposing the said taxes.

“The implementation of the pertinent provisions of RMC 50-2018 relative to the group health insurance premiums are hereby deleted,” said BIR Commissioner Caesar R. Dulay.

The BIR came out with a tax schedule to implement certain provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

Some lawmakers questioned the collection of the taxes following complaints by many employees that the collection of the said taxes was not mentioned in the TRAIN Law.

They expressed the apprehension that they would ultimately shoulder the additional tax burden with employers deducting the insurance payment from their salaries.