City accountant rejects move to subsidize taxes on JOs

CEBU, Philippines- Talisay City accountant Viluzminda Garces-Villarante has thumbed down the proposal to subsidize the taxed being deducted to the job order workers citing Bureau of Internal Revenue rules and regulations.

The 1,700 job order workers, who are complaining of being taxed three percent of their salary, receive a daily basic pay of P300.

In yesterday's council session, Villarante told the members of the council that subsidizing the tax of the job order workers would put a huge dent on the city's coffers.

Villarante said there can be no justification for the government to shoulder the taxes of the job order workers, even temporarily.

"If the city will subsidize, then we will appropriate P6.12 million. Asa man ta manguha niana?" Villarante said.

According to Villarante, the tax deductions on job order personnel in the government do not only cover Talisay but the entire country.

As provided in their contracts, the nature of work of job order employees is not considered government service and that there is also no employer-employee relationship existing between them and the city government.

The proposal of subsidizing the tax of the job order surfaced when City Councilor and Majority Floor Leader Richard Francis Aznar, opened the idea in a privilege speech yesterday.

"I understand that the reason why City of Talisay withholds in the first place is because as the withholding agent, the liability for withholding taxes lies with the city. However, I appeal that a better understanding of the rules on withholding taxes are implored by us for a clear perspective on how it applies to our job order employees," Aznar said.

While all income received by a person is subject to income tax, Aznar said that some income are exempted from taxes.

He cited that job order are minimum wage earners, which they are exempted from payment of income tax based on RA 9504 which was approved by President Gloria Macapagal-Arroyo on June 17, 2008 to benefit workers and minimum wage earners.

"The rule is that minimum wage earners, regardless of their employment status, can be exempt from income if they have no other and additional source of income other than the above basic pay," Aznar said.

Aznar pointed out that purpose of giving exemption to minimum wage earners is to help the job order workers against poverty and ensure their benefit from the whole amount of the statutory minimum wage.

"Our job order employees only receive P300 a day and thus should be considered as minimum wage earners," Aznar added.

Villarante, however, said they are taking the observations made by the city government and that they will be formalizing their query to the BIR regarding the matter.