By Butch Fernandez @butchfBM & Samuel P. Medenilla
Goading government to pay the full amount of tax-free honoraria awaited by poll workers, Senator Sherwin Gatchalian prodded the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to finalize proposals on how poll workers, including public school teachers, can be paid the full amount of their honoraria, allowances, and other benefits.
Gatchalian took the cudgels for thousands of still unpaid teachers assigned to serve in past elections during a Senate panel hearing on the proposed tax exemption on poll workers’ honoraria and other benefits.
“I am appealing to the DOF and the BIR if they can give us a proposal on how we can give the full amount to our teachers,” the senator said.
Pleading on behalf of the unpaid teachers, the senator added: “Pareho naman ’yung ating sentimyento na dapat tulungan yung ating mga teachers, so let us just find a way to give them the full amount.”
Paving the way for airing the plea during a Senate panel hearing on the proposed tax exemption on poll workers’ honoraria and other benefits, Gatchalian earlier filed Senate Bill No. 1193 to make the honoraria, travel allowance, and other benefits granted to poll workers exempt from tax gross income.
SB 1193 provides that the election honoraria and allowances of poll workers, including public school teachers, have never been subjected to tax until the 2018 Barangay and Sangguniang Kabataan elections and the 2019 midterm elections when the BIR imposed a 5 percent withholding tax on their honoraria, but for the upcoming 2022 national elections, they will be taxed 20 percent.
While recognizing the intent to help poll workers and public school teachers, the DOF said that it does not support the proposal to grant tax exemption on their honoraria and other benefits.
Citing a previous ruling from the BIR, the DOF said that poll workers’ honoraria and other allowances, no matter the amount, are wealth that flow into the hands of the recipients and should be subject to income tax.
The DOF also said that the proposed tax exemption is counter to the principles of the Tax Reform for Acceleration and Inclusion law to make the tax system more efficient and equitable.
The agency added that the tax system is not the best way to provide additional benefits to sectors, noting that it could be difficult to implement and could be subject to abuse.
Gatchalian, however, noted that the tax code already provides for different tax exemptions. The 13th month pay, for example, is exempt from tax. When he quizzed the DOF on how the proposed measure will cause inefficiencies in the tax system, the lawmaker also emphasized that elections are only held every three years.
“Exempting them from 20 percent withholding tax is a small recognition for their sacrifice and a small recognition for the extra mile that they demonstrated for our country in terms of assuring democracy,” Gatchalian stressed.
It’s BIR’s call–Comelec
The Commission on Elections (Comelec), for its part, said it would be the BIR, which will have the final say on the matter.
Comelec Commissioner George M. Garcia said they have already submitted two request letters to waive the income tax deduction from teachers.
In the said request letters, Comelec noted that the honoraria given to teachers for their election service are not considered compensation income, professional fees, service fees, which are subject to withholding tax.
It also argued that honoraria is not also covered by value added tax or other percentage tax under the Tax Code.
“We already wrote to BIR twice for our request to exempt them [from tax], but it [BIR] still had no reply,” Garcia said.
He said they also reiterated their position on the matter in the position paper they submitted to Congress on the proposed legislation to exempt the honoraria of members of the electoral boards (EB), which include teachers, from tax deductions.
The poll official said Comelec is determined to grant the exemption to teachers so they could enjoy the P1,000 hike in their honoraria for services they will render for the 2022 polls.
The new rate is as follows: P7,000 for EB chairpersons; P6,000 for EB members; P5,000 for Department for Education Supervisor Official (DESO); and P3,000 for support staff.
“If they will still be taxed, their honoraria will be reduced, it is as if their hike in their honoraria just went to tax payments,” Garcia said.
Last week, DOF reiterated its position that it does not support the exemption of honoraria of EB members since it will be “inequitable” to other people, who are taxed for performing similar activities.