Workers demands BIR return P20B pesos tax refund it owed to workers to mitigate rising inflation

By ALU-TUCP
June 4, 2018

QUEZON CITY – The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) is demanding that the Bureau of Internal Revenue (BIR) and Department of Finance (DOF) return in cash an estimated P20 billion, including interest, that the Bureau of Internal Revenue (BIR) unlawfully collected from millions of minimum-waged workers for seven months back in 2008.

The ALU-TUCP said there is an urgent need to return the workers their money to tide their families in the face of spiraling inflation.

In its 56-page January 24, 2017 ruling, the Supreme Court nullified two provisions of BIR 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.

The Trade Union Congress of the Philippines (TUCP) filed a challenge before the Supreme Court questioning the BIR regulation and asked for its nullification.

The Supreme Court ruled in favor of the TUCP saying that the minimum wage earners (MWEs) should not be taxed because they are exempted from income tax by Republic Act 9502 – the law giving exemption to minimum waged workers from monthly salary tax deduction.

R.A 9502 became effective June 17, 2008. However, the BIR issued Revenue Regulation 10-2008 and have collected income tax from workers for 7 months before the agency suspended their collection.

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

“Minimum wage earners need these additional cash money which they rightfully own in order to cope with the current incredible rising prices of commodities and surging costs of utilities and services. It’s workers’ blood money. We urge the BIR and DOF to return the money including the legal interests now. Until now, the BIR and DOF have not complied with the high court order for them to make a cash refund,” said ALU national president Michael Mendoza.

The ALU-TUCP calls for a cash refund including the annual legal interest the money earned from 2008 to 2017 which ALU-TUCP estimates at P20 billion covering the 10-year period.