BIR: No new taxes imposed on government workers

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Thursday, August 7, 2014

BUREAU of Internal Revenue (BIR) Commissioner Kim Henares told fellow government workers on Thursday that the law imposes withholding tax on their allowances, bonuses and other benefits.

"Under Section 32 of the Tax Code, all compensation, whether in cash or in kind whatever they may be called, are subject to income tax and therefore, proper withholding tax should have been deducted and remitted. Only exemption is up to P30,000 of the 13th month pay and bonuses," she said in a statement on Thursday in response to a petition before the Supreme Court (SC) seeking to nullify her Revenue Memorandum Order (RMO) 23-2014, which took effect last June.

Government workers
MANILA. Government workers ask the Supreme Court to stop the Bureau of Internal Revenue (BIR) from collecting tax from their allowances, bonuses and fringe benefits. (Virgil Lopez/Sunnex)

The government employees slammed the tax memo on Wednesday, claiming it was "probably hastily issued" without much thought about its "ruinous consequences" to their right to enjoy the allowances and other fringe benefits. The same regulation, which was allegedly not sanctioned by the Department of Finance, penalizes authorized withholding officers who fail to make the tax deductions.

Henares said she issued the memo after finding out that the judiciary has been "remiss" in complying with the law, especially in the case of ousted Chief Justice Renato Corona.

"Since Corona was impeached and we filed a tax evasion case against him, stemming from a violation of this, and because this is the law, we have to implement the same to everyone," she said, noting that other government agencies were also guilty of not withholding taxes.

Among the state employees who joined the petition were from the Senate, courts, Department of Agrarian Reform (DAR), Department of Social Welfare and Development (DSWD), Department of Trade and Industry (DTI) and the National Housing Authority (NHA).

There are 1.1 million government employees as of last year, according to the Department of Budget and Management (DBM) (Sunnex

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