To avoid the possible closure of small companies, a lawmaker has filed a bill that seeks to lessen the penalty being imposed on employers or companies that fail to pay the social security remittance of their employees on time.
Representative Nicanor Briones (AGAP Party-list) introduced House Bill 4976 to amend provisions of the Social Security Law on remittances and contributions.
Republic Act 8282, as amended, mandates employers to remit to the SSS its contribution within the first 20 days of each month for which remittances are applicable.
If the contributions are not remitted to the SSS on time, aside from the contribution, employers shall pay a penalty of one-half percent per month or six percent per annum to be reckoned from the date the contribution falls due until it is paid.
The law also provides that every employer who fails to deduct and to remit contributions shall pay a penalty of three percent per month compounded from the date the contribution falls due until it is paid.
“The penalty is equivalent to an annual penalty of 38 percent, which is onerous and burdensome to the companies experiencing heavy financial losses due to the peso devaluation, oil price hike, the pervading clouds of fiscal crisis, and other losses that many of our small companies face,” Briones said.
Likewise, the half percent penalty should not be imposed if the remittance within the quarter is done within the given quarter, he added.
Briones said his proposed measure would help particularly the security agencies that have always been the ones suffering from financial difficulties. These security agencies are the contributors and collecting arms of the SSS and not the borrowers.
He said the biggest problem of the security agencies is the delayed payment of security services by contractors especially government accounts.
The delayed payment lasts up to six months to one year and as a consequence, the security agencies have to advance the share from the salaries of their employees.
“The problem is that the SSS does not accept partial remittance of contributions. Unfortunately, however, the penalty of 36 percent per year would further aggravate the problems of these companies and these companies might close shop rather than incur heavy financial losses,” Briones explained. (PNA)
