By Charissa Luci-Atienza
The Department of Education (DepEd) has rallied behind a House measure seeking to exempt from income tax the compensation given to persons rendering election service for local or national elections.
DepEd Undersecretary Nepomuceno Malaluan expressed DepEd’s support for House Bill 8542, principally authored by ACT Teachers partylist Reps. Antonio Tinio and France Castro.
The bill is pending before the House Committee on Ways and Means, chaired by Nueva Ecija Rep. Estrellita Suansing who earlier expressed support for the measure.
“Yes, of course, [we suppport that bill]. Well, there are two ways to this. Ang problem kasi dito it is in effect compensation income at masyadong masalimuot, kasi may exemption kasi ang tax natin, I think 250,000 or so hindi mo agad makwe-kwenta kung pasok sila na maexempt so talagang mawi-withhold saka pag nagfile pa yan at the end, magiging either tax credit that you can apply for succeeding years masyadong technically tedious ang process,” Malaluan said in an interview during a recent congressional hearing on the DepEd’s performance.
“So it is either way we really discuss with BIR (Bureau of Internal Revenue) how to implement this in a more expeditious way or that can be a solution by Congress to already exempt this from any tax so that hindi na magiging kasama sa pagkwe-kwenta kung may taxable income ba yan or hindi kasi hindi naman tayo by month nagpa-file ng income tax return for compensation talagang sa end of year,” he said.
ACT had questioned the BIR’s imposition of a five-percent withholding tax on compensation given to teachers who served in the 2018 barangay polls. It maintained that the BIR has no legal basis to impose tax on honoraria and allowances for teachers rendering election service.
Based on the Election Service Reform Act (ESRA), the corresponding honoraria for poll workers are: Chairperson of the Electoral Boards – P6,000; Members of Electoral Boards – P5,000; Department of Education Supervisor Official (DESO) – P4,000; and Support Staff – P2,000.
Suansing earlier said they are counting on the Department of Finance (DOF), Commission on Elections (Comelec), Bureau of Internal Revenue (BIR) and National Tax Research Center (NTRC) to submit their respective position on the proposed exemption of compensation rendered by poll workers in local or national elections from income tax.
“We are awaiting for the position paper of DOF, COMELEC, BIR and NTRC,” she said.
Tinio and Castro cited the “urgent need” to enact the bill to clarify the rules and regulations of the BIR and to expressly exempt the persons rendering election service for local or national elections.
“The Election Service Reform Act or Republic Act 10756 significantly increased the honoraria, allowances, and other compensation of volunteers for election service, most of whom are still public school teachers who sit as members of the Boards of Election Inspectors. However, the law is silent as to the tax treatment of such compensation,” they said.
“While, there should be no change in the tax treatment of the honoraria and other compensation for election service–which have never been subjected to income tax prior to the passage of ESRA and the 2019 barangay and Sangguniang elections–recent rules and regulations of the BIR reversed the situation and considered the election compensation as income,” they lament.
Tinio said such act destroys the spirit and intent of the ESRA, which is to compensate the hardships of persons rendering election service.
“They must therefore enjoy their compensation in full and not bear additional burdens,” he said.
HB 8542 provides that all compensation received by persons rendering election service in national or local elections as defined under ESRA or Republic Act 10756 shall not be included in the computation of gross income and shall be exempt from income tax.
The bill tasks the BIR Commissioner to promulgate the implementing rules and regulations of the proposed Act within 90 days after its effectivity.