BIR tells SC justices: Pay taxes on allowances

MANILA, Philippines - The Bureau of Internal Revenue (BIR) urged all individuals, including Supreme Court (SC) justices, who have received allowances or continue to receive allowances to pay the proper taxes if they have not done so.

BIR Commissioner Kim Henares stressed that allowances are not exempt from income tax.

Henares made the clarification after impeachment court proceedings revealed that the SC does not withhold taxes on allowances and other benefits given to Chief Justice Renato Corona and other justices.

A chief judicial staff officer of the SC told the impeachment court that the high tribunal only withholds taxes on justices’ salaries and yearend bonus in excess of P30,000.

Testimonies at the Senate also revealed that from 2002 to 2011, Corona received some P21-million worth of allowances and benefits.

Henares said that if this is the practice in the Supreme Court, it should be corrected.

“Those who received allowances but did not pay withholding taxes should correct the error and pay,” she said.

She said that in case the amount withheld was not correct, the recipients should file an income tax return and settle the difference.

According to the National Internal Revenue Code (NIRC), taxpayers may avail of tax-exempt benefits on transportation allowances and other benefits such as clothing and rice subsidies or allowances that are of relatively small value.

This developed as Henares denied the claims of the spokesperson for the Integrated Bar of the Philippines that the BIR chief could face contempt for declaring under oath that Corona did not file his income tax return (ITR).

“The case may include violation of Code of Ethics, perjury and possible disbarment,” said Trixie Angeles, referring to the impact of the testimony of SC employee defense witness Araceli Bayuga that Corona has completely filed all his income tax as far as the records of the SC is concerned.

However, Henares said she did not violate anything.

“I think disbarment case should be filed against the IBP spokesperson and defense spokesperson when they cannot even distinguish what Bayuga testified to. She testified that the SC filed alpha list for 2002 and 2010. In fact, when asked she did not know if Corona filed an ITR or not. If they do not know the difference between an alpha list and an ITR, then they do not have any business being a lawyer, much less a spokesperson,” Henares said.