House body to look into taxes levied on SSS, GSIS contributions

MANILA, Philippines – The House committee on ways and means will look into another controversial issuance of the Bureau of Internal Revenue (BIR), which imposes tax on contributions to state pension and insurance institutions like the Social Security System (SSS), Government Service Insurance System (GSIS), Philippine Health Insurance Corp. (PhilHealth) and the Pag-Ibig Fund.

The panel arrived at the decision during a hearing approving a motion by Valenzuela City Rep. Magtanggol Gunigundo to conduct an inquiry into Revenue Memorandum Circular 53-2011 issued by BIR Commissioner Kim Jacinto-Henares that taxes optional contributions to pension and insurance firms.

Gunigundo had earlier criticized the directive as anti-poor and in violation of Section 32 of the Tax Code, which exempts employees’ contributions from taxation, be it voluntary or mandatory.

Cagayan de Oro City Rep. Rufus Rodriguez also filed House Resolution 1973 directing the committee to conduct an inquiry, in aid of legislation, into RMC 53-2011 which would make contributions to pension, housing and health funds amounting to more than that required by law subject to income and withholding tax.

Gunigundo said those who would be heavily affected would be the overseas Filipino workers and the self and part-time employees, including the domestic helpers.

Contrary to the BIR’s claim, Rodriguez said these contributions cannot be considered investments hence, should not be taxed.

“These contributions are for social security, not investments, contrary to what they’re saying,” he said.

Earlier, Henares withdrew Memorandum Circular 57-2011 Issued in November that compels individual taxpayers to submit supplemental information detailing their financial transactions including bank deposits, stock trading and property sales.

Lawmakers said the circular was unconstitutional and violates privacy and the Bank Secrecy Law. –Paolo Romero (The Philippine Star)