Supreme Court urged to stop tax on state employees’ benefits

Government employees said that it is beyond the power and authority of the Bureau of Internal Revenue to tax their benefits without an enabling law, and had asked the Supreme Court to prevent the “unlawful and unwarranted imposition of taxes” on their benefits.


MANILA — Boyet Jacinto, an ambulance driver of the Supreme Court’s medical clinic, is paid P11,000 a month. But when asked how much his take home pay is, he answered, “none.”

Jacinto, 52, recalled how life was, in fact, relatively better when he was only earning P3,000 ($68) some 25 years ago. Though the salary is nominally low, their basic needs were at least covered. Today, he said his P11,000 ($250) is not enough to buy their needs – not when prices of staple goods and services are increasing.

Jacinto said that like many government employees, he relied on the allowances and benefits they are receiving to append their meager pay. So when he heard the news that the government, through the Bureau of Internal Revenue (BIR), would impose tax on the benefits of government employees, he said he did not think twice about opposing it.

Boyet Jacinto and his colleagues support petition asking the Supreme Court to prevent imposing of tax on government workers' benefits (Photo by J. Ellao /
Boyet Jacinto and his colleagues support petition asking the Supreme Court to prevent imposing of tax on government workers’ benefits (Photo by J. Ellao /

“When my loans from our cooperative are already deducted, I hardly get anything,” he said, adding that he would use the loan to buy food, send his children to school and to pay their bills.

On Aug. 6, Jacinto was among the hundreds of government employees who accompanied their union leaders in filing a petition with the Supreme Court to grant a temporary restraining order on the BIR memorandum.

Government employees wore red and black to show their opposition to the said memorandum. At a short program held outside the gates of the Supreme Court, some high-spirited employees candidly shouted ad hominem attacks against the Aquino government and its allies for what they deemed as an attack on the rights and welfare of government employees. This garnered laughter and cheers from their colleagues.

Revenue Memorandum Order No. 23-2014 stipulates that all government offices, including government-owned or controlled corporations and local government units, would withhold tax on compensation paid for services of its employees, which include allowances, bonuses and other similar benefits.


In the petition, government employees asked the Supreme Court to prevent the BIR and the Department of Finance, the respondents to the petition, from “unlawful and unwarranted imposition of taxes” on their currently non-taxable allowances, bonuses, compensations for services and other benefits.

(Photo by J. Ellao /
(Photo by J. Ellao /

“Specifically, the allowances, bonuses, compensations for services and fringe and de minimis benefits as mentioned in RMO 23-2014 are beyond the power and authority of the respondents to tax without an enabling law,” the petition read.

The government employees also asked the Supreme Court to declare as unconstitutional paragraphs A, B, C and D of Section III, and Section IV, VI and VII of RMO 23-2014, which enumerated the benefits to be taxed, non-taxable compensation income, those responsible for withholding tax and penalties of violators, respectively.

The petitioners said the respondents “have no power to legally define what are criminal acts, determine who are criminally liable, and provide penalties therefore, as the questioned RMO purports to do.”

The petition also asked the Supreme Court to issue a writ of mandamus ordering the respondents to upgrade the P30,000 ($680) ceiling on the 13th month pay and other benefits for concerned officials and employees.

The said RMO stipulates that any amount exceeding P30,000 ($680) is taxable compensation.

The issuance of the RMO, according to the petitioners, “appears to be an overstretched exercise of power and authority” by the respondents.

(Photo by J. Ellao /
(Photo by J. Ellao /

Petitioners argued that delegating the task of imposing taxes on benefits to local government officials violates the autonomy of local government units, saying that “respondents cannot add to or diminish the powers of decentralization and/or devolution that the Local Government Code (Republic act No. 7160) has granted to local government officials.”

Citing the National Internal Revenue Code, petitioners said the BIR commissioner has no authority to “define what constitutes offenses and to impose fines and worse, imprisonment, therefore, at her own behest.”

They said the BIR has usurped the power of the legislative branch, both the Senate and the House of Representatives.

A pound of flesh

Courage, a national organization of government employees who led the filing of the petition, said government employees “have barely endured life’s whammies on public sector workers such as starvation pay, four years of unheeded calls for wage adjustment and price cutback, combo with disallowances and refund orders on benefits to boot.”

“And here comes BIR with a wallop of a revenue demand on what is left of our benefits. We are way too deep in debt but this is fate far worse than debt,” Courage said.

In a statement, Ferdinand Gaite, national president of Courage, said RMO 23-2014 “is like a boulder hurled to drowning employees in the bureaucracy. It is oppressive and unfair,”

“We are calling on the Justices of the Supreme Court to put a lid on this seeming abuse of authority. As if the 20 percent of withholding taxes from our meager pay is not enough, the BIR is requiring agency heads to chop-off levies on the benefits we depend on to augment our income. The BIR is demanding from each employee a pound of flesh,” Gaite said.

“I feel bad that they are going to impose taxes on our already measly benefits,” Jacinto said, “I am asking them not to remove or lessen our benefits. What would happen to the lowly employees?”

(Photo by J. Ellao /
(Photo by J. Ellao /

“Why are they suddenly interested with the meager benefits we are receiving? (This government) only wants to prove that the executive is mightier than other government agencies,” Jojo Guevarra of Judiciary Employees Association of the Philippines told the media.

To President Aquino, Jacinto said, “Heed the call of the people. We are fighting for the good of all government employees and not just self-serving interests.” (

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