BIR just trying to prevent another 'Corona tax deficiency' – Kim Henares

There are no new taxes imposed on employees' compensation, and the Bureau of Internal Revenue (BIR) is enforcing an old law on allowances and bonuses to prevent similar tax liabilities in the judiciary allegedly incurred by ousted Chief Justice Renato Corona.

 

BIR Commissioner Kim Henares made the statement on Thursday after groups of government employees filed a petition asking the Supreme Court (SC) to stop her bureau from imposing taxes on allowances, bonuses and other benefits. 

 

In a text message to Malacañang reporters, Henares maintained the BIR only issued Revenue Memorandum Order (RMO) No. 23-2014 in compliance with the National Internal Revenue Code (Republic Act 8424), which was enacted in 1997.

 

"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 may be called, are subject to income tax," Henares said Thursday.
 

"Therefore, proper withholding tax should have been deducted and remitted. Only exemption is up to P30,000 of the 13th month pay and bonuses," she added.

 

The petition filed before the SC by government employees – including those from the judiciary, the Senate and executive departments – claimed the BIR's new order would pave the way for "unlawful and unwarranted imposition of taxes, and their illegal and illicit collection."

 

The BIR chief however maintained that the private sector and the executive branch "have been strictly monitored for compliance" when it comes to the provision under the tax law on allowances and bonuses.

 

'Judiciary remiss in complying'

 

Henares likewise said that Corona's impeachment trial, which led to the then-chief magistrate's ouster in May 2012, exposed the tax deficiencies incurred by the judiciary. 

 

"The Corona impeachment put it to our attention that the judiciary has been remiss in complying," she said.

 

"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 added.

 

Corona, who was impeached on accusations that he failed to fully disclose his wealth, is currently facing a tax evasion case before the Court of Tax Appeals for allegedly not paying his tax liabilities and for failing to file tax returns properly. 

 

The bureau has the "obligation" to enforce the tax law, Henares noted, adding that doing otherwise might get the BIR penalized under the same legislation. – VS, GMA News