Teachers protest tax on performance bonuses

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MANILA, Philippines—On top of their basic protest against Malacañang’s new bonus scheme, public school teachers have another complaint against the performance-based bonus (PBB) scheme: tax deductions.

Public school teachers were surprised to find that varying percentages were deducted from their long-awaited bonuses as income tax, according to Alliance of Concerned Teachers national chair Benjie Valbuena.

“Performance bonuses should be nontaxable,” Valbuena asserted while noting that the tax was not imposed on all teachers.

“That’s the problem. We received a lot of complaints about the tax. Here in (the Department of Education Division of Manila) there was no tax. He said the deductions for income tax on the PBB also differed among the various DepEd divisions.

 

Varying deductions

In Bacolod City, he said, public school teachers saw 20 percent withheld from their bonuses as income tax. But it was 15 percent in Ilocos Norte; eight percent in Oriental Mindoro; and 15 percent in Bulacan, according to Valbuena.

He said taxes were also deducted from the PBBs of teachers in Davao City, Davao del Norte, Negros Occidental and Cabiao in Nueva Ecija.

The first batch of 409,725 public school teachers and school nonteaching personnel received their PBB for 2012 in the third week of July.

The PBB took the place of the usual yearend bonus for DepEd’s 600,000 teachers and personnel.

DepEd acknowleged there were complaints about the tax deductions. “There have been questions regarding the withholding of income tax on the recently released performance-based bonus.”

Deceptive, divisive

“The department is simply following the rules set by the BIR (Bureau of Internal Revenue), specifically BIR Revenue Regulations 2-98 or Withholding Taxes on Income Payments, Compensation and Creditable Vat and Percentage Taxes. The circular states that bonuses exceeding P30,000, aggregate for the entire year, shall be subject to withholding tax, which must be deducted outright,” it added.

Valbuena said they will press their protest against the PBB tax deductions, which he earlier described as “deceptive and divisive.”

Another teachers group, the Teachers Dignity Coalition, similarly protested and demanded a return to the previous scheme of giving an across-the-board yearend bonus to all government employees.

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