MANILA, Philippines — The Bureau of Internal Revenue (BIR) stood firm Wednesday on its decision to tax extra or voluntary contributions made by government and private employees to state pension and insurance firms like the Pag-IBIG, Social Security System, Government Service Insurance Corporations and PhilHealth despite strong opposition from members of Congress and other sectors.
“We will come out with another circular reiterating the impositions of the tax under Revenue Memorandum Circular (RMC) No. 53-2011,” said Jethro Sabariaga, chief of staff for legal matters of BIR Commissioner Kim S. Jacinto-Henares.
He said that, contrary to news reports, overseas Filipino workers and minimum wage earners like household help are not covered by the circular as these groups of taxpayers are exempted from taxation under the Tax Code.
“They can put all their earnings in the said insurance companies and they will not be taxed,” he said.
Earlier, Henares said that mandatory contributions are still exempted from income taxation under the memorandum.
Covered by RMC 53-2011 are extra contributions which are considered investments, she said.
The BIR came out with the RMC last July after noting that insurance companies have come out with various projects encouraging their members to increase their monthly contributions to hike their pensions when they retire and upgrade their health care coverage. –JUN RAMIREZ, Manila Bulletin
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