Allowances are taxable, says BIR’s Henares

Taxpayers, including Supreme Court (SC) justices, who received allowances should pay taxes, the Bureau of Internal Revenue (BIR) said Tuesday.   Allowances are taxable and should be computed and paid as part of the income tax, said BIR Commissioner Kim Henares.   Henares made the statement in light of a witness’ testimony in the impeachment trial of Chief Justice Renato C. Corona that the Supreme Court does not withhold taxes on the allowances and other benefits given to the chief justice and other justices.   SC chief judicial staff officer Araceli Bayuga told the Senate impeachment court on March 13 the high tribunal withholds taxes only on salaries and year-end bonuses that exceed P30,000.   During the March 13 hearing, SC records were presented showing the chief justice received some P21 million in allowances and benefits from 2002 to 2011.   This practice in the Supreme Court should be put to right, Henares noted. “Those who received allowances but did not pay withholding taxes should correct the error and pay,” she said.   In case the withholding tax was incorrect, the taxpayer should settle the difference by filing an income tax return to correct the mistake, Henares added.   Taxpayers may avail themselves of tax-exempt benefits on transportation allowances and other benefits — like clothing and rice subsidies or allowances — that relatively are lower in value, according to the National Internal Revenue Code.   Meanwhile, Henares denied the allegation of the Integrated Bar of the Philippines spokesperson that the BIR chief may face contempt for declaring under oath that Corona did not file his income tax return (ITR).   “The case may include violation of Code of Ethics, perjury and possible disbarment,” said lawyer Trixie Angeles.   According to Bayuga, Corona has filed all his income tax returns based on SC records.   Instead, Henares claimed she did not violate anything. “I think disbarment case should be filed against the IBP spokesperson and defense spokesperson when they cannot even distinguish what Bayuga testified to.   In her testimony, Bayuga said the SC filed its alpha list for 2002 and 2010.   However, she testified she did not know if Corona filed his ITR. “If they do not know the difference between an alpha list and an ITR, then they do not have any business being a lawyer much less a spokesperson,” said Henares. — VS, GMA News