No
pay hike for state workers but more taxes yes
August 11, 2014 11:41 pm
President Aquino promised to listen
to his boss—the Filipino people. And yet his administration is turning out to
be most insensitive.
There will be no pay hike for
government employees this year and the next, not until 2016 if ever the
Department of Budget and Management completes its assessment of the
compensation classification system (CCS) of government employees, which it
doesn’t seem in a hurry to do so.
And yet the Bureau of Internal
Revenue (BIR) is imposing new taxes on government employees’ financial benefits
and allowances.
Talk about a double whammy.
These allowances and other benefits,
which include honoraria, food subsidy, hospitalization and medical benefits,
clothing, cost-of-living and transportation allowances, and monetized value of
leave credits were never taxed before.
But Revenue Memorandum Order (RMO)
23-2014 that the BIR issued in June and started implementing last month imposed
a 30% to 32% tax on these benefits.
Again, so insensitive.
The benefits that government
employees receive are supposed to support their families’ everyday needs, precisely because their compensation
is not enough. Most of them are buried in debt, borrowing in advance their
monthly salaries or relying on credit cards to make it until their next payday.
Most government workers are not high officials with top
salaries and perks, who get paid in thousands just for attending the board
meetings of their government corporations, or are driven around in gas-free
vehicles.
Most government workers’ salaries are eaten up by their
household bills, their pay hardly enough to cover the skyrocketing prices of
basic commodities, oil, gasoline, electricity and water bills.
Government workers really need these fringe benefits to
survive. Why charge them such a substantial amount in taxes?
Why not go after the smugglers? From 2002 to 2011, the
government lost more than P1.33 trillion in revenue due to smuggling, according
to the Federation of Philippine Industries.
By imposing additional burdens on the already overburdened
state workers you are taking away their incentive to deliver efficient service
to the general public.
How can you work properly or focus your attention on the
needs of the citizen in front of you if you are worried about where to get your
child’s tuition or how to pay your overdue electricity bill?
Indeed, the BIR’s oppressive deductions on their benefits in
the absence of salary increases tempts state workers to commit graft and
corruption just to make ends meet.
Former Senate President Aquilino Pimentel Jr. led the
government employees in filing the petition before the Supreme Court assailing
the BIR’s new memorandum imposing hefty taxes on their benefits and bonuses.
We thank him for taking up the cudgels for our state
workers. We in the Trade Union Congress of the Philippines fully support this
fight.
RMO 23-2014 of the BIR must be nullified. According to the
petitioner/government employees, it is unconstitutional as it usurps the power
and authority of the legislature in defining new offenses and prescribing
penalties, particularly on local government units.
“The duties imposed on the local government officials
mentioned in the paragraphs immediately preceding thrash the principles of
decentralization and local autonomy set forth in the Local Government Code of
1991, Republic Act 7160,” the petitioner said.
The petitioner said the BIR also violated Section 2 of the
National Internal Revenue Code when it implemented the RMO without necessary
approval of the secretary of finance.
Tax measures should be just, fair and executed equitably but
here they are oppressive and unfair; and this particular one really calls for
second thought and appropriate action.
I already said this in a previous column but I will never
get tired of saying it: Workers are already overburdened by taxes in this
country.
The Philippines has the third highest individual income tax
rate in the Association of Southeast Asian Nations (Asean), after Thailand
(37%) and Vietnam (35%).
Then there is the value added tax, which at 12 percent here
is higher than Malaysia’s 10 percent, Singapore’s 7 percent, Thailand’s 7
percent, Australia’s 10 percent and Japan’s 5 percent.
The VAT causes prices to increase, reducing the worker’s
ability to purchase goods and services. Worker’s wages further decline because
their purchasing power declines.
Now the government is even deducting a third of the benefits
of poorly paid state workers.
Again, we would not complain if we are getting our taxes’
worth but every day we experience absurdities that illustrate the contrary,
like flooded, traffic-choked and crime-infested streets, poor public services,
and sickening corruption from the lowest to the highest ranks in government.
