Henares to gov’t employees: What new tax?

BIR Commissioner Kim Henares. AP FILE PHOTO

MANILA, Philippines – The Bureau of Internal Revenue (BIR) on Thursday clarified that it did not impose a new tax after government employees associations complained about the withholding tax on their fringe benefits.

“We would like to clarify that we did not impose any new tax. We issued an RMO (Revenue Memorandum Order) to clarify that 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,” BIR Commissioner Kim Henares said in a statement.

“This has been the law since 1997,” she pointed out.

Twelve employees’ associations and confederations representing 300,000 government workers trooped to the Supreme Court on Wednesday to petition against the so-called “oppressive taxation” of the BIR.

Former Senator Aquilino Pimentel Jr., who served as the groups’ pro bono counsel, said the BIR should not impose additional taxes on allowances and bonuses, which are considered “pantawid-gutom” or “cross hunger” measures.

Their 73-page petition questioned RMO 23-2014 issued on June 20.

But Henares was adamant that both the private sector and the Executive branch should know the rules especially when “they have been strictly monitored for compliance.”

“The Corona impeachment put it to our attention that the Judiciary has been remiss in complying. 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 explained.

“The obligation to withhold of government is further emphasized by Section 272 (of the Tax Code) because it provides a penalty for violation committed by government,” she added.
 

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