MANILA – Bureau of Internal Revenue (BIR) commissioner Kim Henares insisted there were no new taxes imposed on government workers.
On Thursday, Henares defended a memorandum order that required the withholding of income taxes on government employees' bonuses, allowances and other benefits.
Henares said the Revenue Memorandum Order (RMO) 23-2014, which is being questioned at the Supreme Court, merely implements the National Internal Revenue Code.
Under the RMO, the BIR clarified that fringe benefits cited in the Tax Code and other bonuses exceeding P30,000 shall be taxed, and withholding officers will face fines for failing to make tax deductions.
"We would like to clarify that we did not impose any new tax. We issued an RMO to clarify that under Section 32 of the Tax Code, all compensation, whether in cash or in kind whatever they maybe 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. This has been the law since 1997," she said.
Henares said the private sector and Executive branch of government are already implementing this, and have been strictly monitored for compliance.
However, the BIR chief noted the Judiciary has been "remiss" in complying with this particular section of the Tax Code. She cited the case of the allowances of ousted Supreme Court Chief Justice Renato Corona which were discovered to have not been taxed.
"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. The obligation to withhold of government is further emphasized by Section 272 because it provides a penalty for violation committed by government," she said.
''Tinatama lang natin ang matagal na 'di nila ginagawang tama. Kung pagbibigyan sila ng Supreme Court…[that is] violation of equal protection of the law, kasi ang batas maliwanag eh," she said, in a separate interview on DZMM.
Henares said government employees must be the first to observe the law. She said the Tax Code does not discriminate between public and private sector employees.
She added the tax code punishes withholding officers who fail to carry out their duty.
In their petition for a halt order against the BIR memorandum, the government employees sought to raise the taxable amount of 13th month pay which is currently at P30,000.
The petitioners also claimed that the RMO was implemented without the approval of the Finance secretary, violating the National Internal Revenue Code.
Henares explained that the BIR intensified its tax campaign after learning that certain government agencies were not withholding taxes for certain bonuses cited in the tax code.
She also said that government officials who received fringe benefits but did not pay the corresponding taxes may actually be charged with malversation.
''Kapag sinabi mong fringe benfits, binili ng gobyerno. Kapag 'di pala ginagamit ng goberyno pero para sa pangsarili, eh 'di nag-violate tayo, malversation,'' she said.