House Bill 5609 seeks to correct the “unfair situation” resulting from Internal Revenue Commissioner Kim Jacinto-Henares’s Revenue Memorandum Circular 27-2011 which would slap taxes on voluntary contributions to Pag-Ibig Fund, GSIS and SSS.
“Instead of helping Filipinos get out of poverty, the government is further pushing them down by taxing what meager savings they put in these institutions,” said Party-list Rep. Teodoro Casiño of Bayan Muna in filing the bill.
Casiño said it is disturbing that the BIR is always trying to get the hard- earned money of wage earners and the middle class.
Besides taxing the contributions, Casiño also cited the BIR’s Memorandum Circular 57-2011 that requires taxpayers to provide additional detailed information on their financial position and operations which several sectors contend to be unconstitutional and perceive to be a violation of the right to privacy.
Henares issued the circular on November 25 to compel individual taxpayers to submit supplemental information detailing their financial transactions—from bank deposits to stock trading to property sales—beginning next year.
Despite several appeals from legislator, Henares refused to withdraw the order prompting the House of Representatives’ Committee on Ways and Means to invite Finance Secretary Cesar Purisima to attend the congressional hearing on the matter.
During the hearing on Tuesday, Purisima assured congressmen that he would immediately prepare a draft revenue regulation that will address the concerns and input proposed corrections to the said memorandum.
Casiño said Henares should focus on taxing the rich and big corporations instead of ordinary employees who are already the most taxed, as their taxes are automatically withheld.
“Taxing Pag-IBIG and SSS contributions means reducing the capacity of ordinary employees to build their houses or save for their future,” said Casiño.
Earlier, Lakas-Kampi-CMD Rep. Maria Milagros Magsaysay of Zambales, urged the BIR to re-evaluate its decision to tax voluntary contributions, saying that instead of collecting taxes ordinary citizens’ payroll deductions made for their contributions to housing, health and pension funds, the bureau should improve tax collections and go after tax evaders to plug revenue loopholes of the government.
“Most of these voluntary contributions are not really huge amounts, just regular employees’ attempt to save a little more in order to collect more from the government agencies when it becomes time for them to collect their pension. There is really nothing wrong with that unless the BIR sees any reason for excess,” said Magsaysay.
Magsaysay said that even the government agencies concerned are against the new tax as this will affect their drive to draw in more savings which are being used to boost the funds in question.
