April 2, 2017
QUEZON CITY – The Bureau of Internal Revenue (BIR) owes each 600,000 minimum-waged workers nationwide with an estimated P9,000 “blood money” from the tax they collected for six months in 2008 amid a law exempting the workers from withholding tax, labor group Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) said yesterday.
In its decision released on February this year, the Supreme Court said minimum wage earners (MWEs) should not taxed because they are exempted from doing so by Republic Act 9502 – the law giving exemption to minimum waged workers from monthly salary tax deductions.
The law became effective June 17, 2008. However, the BIR issued Revenue Regulation 10-2008 and only exempted MWEs six months later. The TUCP filed a contesting petition at the SC nullifying the regulation as contrary to the law.
It is estimated the BIR collected an average P792 a month for six months from each MWEs at that time but the BIR should also be charged with 12% legal interest fees for nine years, said Alan Tanjusay, spokesperson of ALU-TUCP.
“This is a subtle form of injustice done by BIR for minimum-waged workers who depended on their daily pay to make both ends meet. The amount of money the BIR collected is blood money that could have been spent to buy food, pay for tuition fees and purchase medicines,” Tanjusay said.
He said the ALU-TUCP is urging the SC to hasten the specific implementing rules and regulations that lay the mechanism for the actual refund.
“We suggest the cash refund should be coursed through the employers if the employers are still existing. If the company has shut down, we suggest the refund should be disbursed through BIR regional offices,” Tanjusay said.
Refund by means of tax credit is more problematic because most of minimum-waged earners at that may have become unemployed or remained at the same minimum waged level and so they are still tax-exempt, Tanjusay added.