ADB Pinoy employees exempt from paying income tax – RTC

MANILA, Philippines - The Regional Trial Court of Mandaluyong City has affirmed its ruling that Filipino employees of the Asian Development Bank (ADB) are exempted from paying income taxes.

The Mandaluyong court denied the motion for reconsideration filed by the Bureau of Internal Revenue, saying the latter failed to raise any new or substantial ground or reason that would necessitate the nullification of its earlier order.

“The grounds or issues raised in the said motion for reconsideration had already been passed upon by this court in the decision sough to be reconsidered.  Discussing again now the ratio decidendi of this Court’s decision would be to belabor the issued ad infinitum,”  Mandaluyong RTC Judge Carlos A. Valenzuela said.

Valenzuela ruled that the BIR’s circular, which requires Manila-based ADB employees to pay income taxes, was “void for being issued with no legal basis, in excess of authority and/or without due process of law.

According to the BIR circular, “only officers and staff of the ADB who are not Philippine nationals shall be exempt from Philippine income tax.”

The ruling was in response to the case filed by two ADB employees Erwin Salaveria and Portia Gonzales on behalf of the multilateral lender’s employees last February.

Several officers and staff of the ADB were earlier sued by the BIR for their refusal to  pay  taxes despite the notices sent by the agency.

The BIR said   it even established a kiosk at the lobby of the ADB headquarters in Ortigas  to serve as a one-stop window where local ADB personnel can transact business and accommodate registration, transfer of registration and updating of records, filing of ITRs and payment of taxes.

Payment of taxes by Filipino ADB employees was even extended by the BIR from April 15, 2013 to July 15, 2013, the government’s main tax collection agency said.