DOF rejects tax exemption on election honoraria of teachers, other poll workers

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Metro Manila (CNN Philippines, April 21)— The Department of Finance is rejecting proposals to exempt from income tax the honoraria and allowances of teachers and other individuals rendering their services during the elections.

“We do not support the proposed tax exemption,” Arvin Lawrence Quiñones, Director IV of the DOF’s policy, research, and liaison office, said at a Senate committee hearing on Thursday.

He explained that the honoraria and benefits given by the Commission on Elections to poll workers form part of their gross income, which are subject to income tax.

Atty. Anne Loraine Garcia of the Bureau of Internal Revenue's law and legislative division said it's "improper" to consider these professional fees subject to a lower, 5% tax, since the teachers are providing services outside of their profession. She added that under the law, those with annual taxable income beyond ₱250,000 are subject to a 20% tax.

Meanwhile, Quiñones added that the Tax Reform for Acceleration and Inclusion or TRAIN law provides sufficient relief for taxpayers and additional exemptions may go against the goal of making the taxation system more efficient and equitable.

“Exempting one kind of activity, in this case, the electoral services that our teachers provide, will be inequitable to other similar activities that provide the similar kinds of benefits. It’s like saying we want to prefer one service and give exemptions to them, to the detriment of others,” Quiñones said.

These are similar to the arguments laid down by the department in a position paper signed by Finance Secretary Carlos Dominguez and submitted to Congress last year in response to House Bill No. 9652.

This bill seeks tax exemption for the honoraria, travel allowances, and other benefits given to poll workers. The House of Representatives approved the bill on third and final reading last August while three counterpart measures are pending in the Senate.

Senate Committee on Ways and Means chairperson Pia Cayetano told reporters she will balance DOF’s concerns with the plight of the teachers. She said she’s inclined to file a committee report adopting the House version and hopes it will be tackled in the plenary as soon as session resumes on May 23.

“I have to be practical also in my committee report. Kung sobrang hirap naman din for DOF to do that then baka lalong hindi — pwedeng maveto yan ha? Just to be clear, hindi natin alam” Cayetano said.

[Translation: If it's too difficult for DOF to do that then it might not -- that can be vetored. Just to be clear, we do not know at this point.]

According to the Department of Education, some 600,000 of its teaching and non-teaching personnel will serve in the May 9 polls.

Some of them report that a 20% tax has already been deducted from the transportation allowances received during their training ahead of the elections. Benjo Basas, national chairperson of the Teachers’ Dignity Coalition, cited a recent incident in Metro Manila where teachers were given ₱800 as travel allowance after being deducted the 20% tax.

Tinanong namin ‘yan, ang sabi po ng Comelec ay for tax nga po. Meron pa ngang inannounce na maghanda na po ng ₱200 na pangsukli dahil ₱1,000 na buo ang pera from Comelec staff,” he said.

[Translation: We asked about that, and Comelec said it’s for the tax. Someone was even announcing teachers should prepare a P200 change because Comelec staff are giving away a P1,000 bill.]

Another group, the Manila Public School Teachers Association, took a swipe at the Comelec’s dismissal at the division level of the disqualification cases against presidential candidate Ferdinand “Bongbong” Marcos, Jr.

Hindi lang kami simpleng malungkot. Nagagalit kami kung paano kami tinatrato ng mga institusyon na ito,” said Louie Zabala, the group’s president. “Bakit may malaking tao na tumakbo sa mataas na posisyon pero inallow ninyo at sa halip dapat silang buwisan, hindi kaming mga teacher?”

[Translation: we are not just sad. We are angry at how these institutions are treating us. Why allow a prominent person to run for the highest position despite tax violations?]

Poll workers' basic honoraria increased by ₱1,000 for the coming polls — ₱7,000 for the chairperson of the electoral board, ₱6,000 for its members, ₱5,000 for the DepEd supervisor official, and ₱3,000 for the support staff — on top of varying allowances.

"May bahagyang pagtaas sa honorarium at allowance ngayong 2022 ngunit mapupunta lamang halos lahat ng ito sa pagpataw ng 20% buwis," said Vladimir Quetua, president of the Alliance of Concerned Teachers NCR Union.

[Translation: There's a slight increase in the honorarium and allowance for 2022 but almost all will go to the imposition of 20% tax.]