BIR owes 600K workers P9,000 each in tax case

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THE country’s biggest labor federation has called on the Supreme Court (SC) to hasten the issuance of Implementing Rules and Regulations that would lay down the mechanism for the refund of the estimated P5.4 billion in taxes that was illegally collected from workers by the Bureau of Internal Revenue (BIR).

Labor group Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) on Monday said the BIR owes 600,000 minimum wage workers nationwide an estimated P9,000 “blood money” each from the tax they collected for six months in 2008 amid a law exempting minimum wage workers from withholding tax.

In a decision released last month, the High Tribunal ruled that minimum wage earners (MWEs) should not be taxed because they are exempted from doing so by Republic Act 9502, the law giving exemption to minimum wage workers from monthly salary tax deductions.

The law became effective on June 17, 2008.


The BIR, however, issued Revenue Regulation 10-2008 and only exempted MWEs six months later.

The TUCP filed a contesting petition before the SC nullifying the regulation as contrary to the law.

It is estimated the BIR collected an average of P792 a month for six months from each MWE at the time.

The bureau should be charged 12 percent legal interest fees for nine years, according to Alan Tanjusay, ALU-TUCP spokesman.

“This is a subtle form of injustice done by the BIR for minimum wage 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 and purchase medicines,” Tanjusay said.

“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,” he added.

Tanjusay pointed out that refund by means of tax credit is more problematic because most of the minimum wage earners may have become unemployed or remained at the same minimum wage level and so they are still tax-exempt.

WILLIAM B. DEPASUPIL

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