Tax on health premiums immoral, say labor groups

Labor groups have urged the Bureau of Internal Revenue (BIR) to rescind an order taxing premiums for health insurance paid by employers for their workers, calling the policy not only “immoral” but also “insensitive.”

The Nagkaisa labor coalition president, Sonny Matula, accused the BIR on Monday of being “detached from the ordinary life” of Filipinos and “desperate in collecting taxes” when it decided to tax the health premiums.

The collection for the tax was not even part of the tax reform program, Matula said.

Under BIR Revenue Memorandum Circular No. 50-2018, which clarifies provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the premiums on health cards of all employees under group insurance “shall be included as part of other benefits… which are subject to the P90,000 threshold.”

This means that if a worker’s health premium and benefit exceed P90,000, the excess amount will be subject to income and withholding taxes. Previously, premiums on health cards were tax-free.

Basic health service

“As a matter of principle, it is immoral and insensitive for government to profit from taxing workers for the basic health services they gained, which government failed to provide them in the first place,” Matula said in a statement.

He noted that health care coverage by PhilHealth (Philippine Health Insurance Corp.) and other government institutions was not enough to take care of patients suffering from serious illnesses.

Over the weekend, TRAIN’s principal author, Sen. Juan Edgardo “Sonny” Angara, called on the BIR to withdraw its memorandum, especially that the tax reform program does not have any provision stating that health cards should be taxed.

Angara’s statement came six months after the BIR issued the memorandum.

In a statement, the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) said the BIR memorandum “does not help workers and their families at a time when the law should protect more those who have less.”

“This BIR disconnect with the working people is always oppressive to workers because they make policies without consultations with labor groups,” said ALU-TUCP spokesperson Alan Tanjusay. —Jovic Yee

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