Salceda proposal could hasten passage of poll workers' tax exemption law

Published May 27, 2022, 10:50 PM

by Ellson Quismorio

Calling it a “well-deserved tax relief” for poll workers, Albay 2nd district Rep. Joey Salceda has recommended the adoption of Senate Bill (SB) No. 2520, which only modified House Bill (HB) No. 9652, or the proposed Poll Workers’ Tax Exemption Act.

Albay 2nd district Rep. Joey Salceda (Facebook)

In a memorandum sent to the House leadership, Salceda recommended “the adoption by the House of SB No. 2520, or the [proposed] Poll Workers’ Tax Exemption Act”.

The bill has been approved on second reading by the Senate on May 26, 2022 and is expected to be approved on third reading by May 30, 2022. The House approved its version of the measure back in August 2021.

“The Committee on Ways and Means recommends adoption, as there is no substantive difference between the Senate and House versions. The Senate version merely clarifies that the exemption shall apply to the May 2022 elections and thereafter,” wrote Salceda.

Salceda said that he is “not of the attitude that the government should tax honoraria for election service, especially given the risks of such a job”.

“Election workers did a job well done in one of the fastest and smoothest elections in the country’s history. It’s well-deserved tax relief,” the economist-solon said. The polls were carried out last May 9.

Salceda also explained that under the current tax treatment, the income of board of election inspectors (BEIs) and other poll workers form part of the taxable income subject to personal income tax under Section 32 of the National Internal Revenue Code as amended.

“Most BEIs are public school teachers. Because the lowest salary grade for public school teacher plantilla positions already exceeds the P250,000 exemption under the Tax Code, the entire election honoraria is typically subject to the 20 percent tax rate on marginal income. The Commission on Elections (Comelec) typically withholds this portion of the honoraria already,” Salceda said.

“The proposal of both the House and the Senate is to include ‘honoraria, travel allowance, and such other benefits as may be granted by the [Comelec] to persons rendering election service pursuant to Section 4 of Republic Act No. 10756, otherwise known as the Election Service Reform Act among exclusions from gross income subject to personal income tax. This would effectively exempt these earnings from tax,” he further said.

Salceda also estimates that “[f]oregoing the 20 percent tax on this amount would be equivalent to a tax revenue loss of P415 million. Considering that elections do not take place every year, this would amount to an annualized revenue loss of around P138.6 million”.

“My committee has run after tax evaders, smugglers, corrupt customs, ecozone, and internal revenue officials, and their accomplices in other agencies. I will not go after election workers, especially given how reasonable the cost of the exemption is…The foregone revenue is just one good tax or smuggling raid [done well],” he noted.

He said it would be a “bad look” for government to pay the election worker a certain amount, but slashes a fifth of it as tax before it is even received.

“For this reason, the Committee on Ways and Means will recommend the fastest way forward for this bill, para umabot pa (so it may get enacted soon]. We strongly recommend adoption by the House, so PRRD [President Duterte] can sign it before his term ends,” Salceda said.