BIR urged to return P5 billion tax refund it owes to poor workers

By ALU-TUCP
November 17, 2017

QUEZON CITY – Workers’ group Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) is demanding the Bureau of Internal Revenue (BIR) and Department of Finance (DOF) to return in cash an estimated P5 billion they unlawfully collected from minimum-waged workers nationwide for seven months back in 2008.

The group insists a cash refund including its legal interests the collected money earned from 2008 to 2017.

“We cannot understand why the BIR and the DOF is quick to squeeze money from the workers but it takes forever for them to return those. Mahiya naman kayo! Those are workers’ blood money. Pinaghirapan na yan ng mga manggagawa, ibalik na ninyo! said Alan Tanjusay, ALU-TUCP spokesperson.

In its 56-page January 24, 2017 ruling, the Supreme Court nullified several provisions of BIR Internal Revenue Regulation 10-2008 that disqualify Minimum Waged Earners (MWEs) from tax exemptions on their wage, bonus, and other compensation benefits such overtime pay, hazard pay, holiday pay, and night shift differential pay including fringe benefits in excess of P30,000 including those who received their 13th month pay bonus.

In other words, the BIR continued to collect taxes on the basic wage, bonuses and other benefits from millions of minimum-waged workers nationwide from June to December 2008 despite of a law exempting minimum-waged workers from such taxes starting July 6, 2008.

The SC also directed the BIR to grant a refund or allow a refund through withheld tax adjustments or a claim for tax credits by those subjected by IRR 10-2008.

“Some minimum-waged workers who were subjected to tax may have remained a minimum-wage earner up to this day but they cannot claim for tax credit because they are exempted from income tax.

Some may have been promoted and some may have been unemployed. Some have become OFWs. Some are already deceased,” Tanjusay said, adding: “In fairness to the workers subjected by the regulation, the best option here is a cash refund.”