The House Committee on Ways and Means on Monday approved an unnumbered substitute bill exempting the honoraria of election servers from income and other withholding taxes.
Albay Rep. Joey Salceda said the lower chamber can fast-track the passage of the measure in time for the 2022 elections.
Members of the Board of Election Inspectors (BEIs) and other election personnel, typically public-school teachers, are given allowances for serving in national and local elections under Republic Act 10756, or the Election Service Reform Act.
Data from the Commission on Elections (Comelec) showed taxes withheld for the 2019 National and Local Elections amounted to P56.8 million.
“My mother was a teacher for 43 years, so I support this measure. The cost is very reasonable, at around P56.8 million. It’s worth apprehending just one big-time tax evader. It’s an easy choice,” said Salceda, who will be a principal sponsor of the substitute bill to the measures filed by Rep. France Castro and Rep. Lloren Cuaresma.
“Considering both the risks election workers take, the relatively small size of their compensation for such an important function, and the reasonableness of the tax foregone, this proposal does not pose serious threats to our revenue strength,” Salceda said.
The lawmaker said the substitute bill would have a provision that amends the National Internal Revenue Code of 1997, as amended, to exclude election-related honoraria and allowances from the computation of gross income.
The bill specifically notes “honoraria, travel allowance, and such other benefits as may be granted by the Commission on Elections [Comelec] to persons rendering election service pursuant to Section 4 of Republic Act 10756, otherwise known as the Election Service Reform Act” from Section 32 of the tax code.
‘Mature workers’
Meanwhile, Salceda said his committee will support the passage of a proposal that would encourage businesses to hire “mature workers” or workers aged 40 and above by granting them tax cuts for doing so.
“The productivity gains to hiring workers with life experience will be immense. Under the current culture, most employers hire only fresh graduates. They are less enthusiastic about taking older applicants in. This is of course a problem, especially because many older applicants have families to support,” Salceda said.
Salceda added that the culture “wastes the valuable accumulation of skills that only older employees can deliver for a firm.”
He, however, warned principal authors that the Executive departments may push for a veto of the tax provision if the case for it is not “well-argued and well-established.”
“This is not a revenue measure, so if a provision can be vetoed, the whole bill will not be approved. That is why I hope to propose some revisions to the proposal so that we can push it through enactment,” Salceda said.
Salceda assigned Senior Vice Chairman Estrellita Suansing, Vice Chairman Sharon Garin, and Rep. Jericho Jonas Nograles to recommend to him an alternative formulation of the tax provision so it would be less prone to abuse.
Under the current proposal, firms that hire “mature employees” will be “entitled to an additional deduction from their gross income, equivalent to 15 percent of the total amount paid as salaries and wages.” This means that 115 percent of labor expenses for covered hires will be recognized by the Bureau of Internal Revenue (BIR) as a deduction from gross income for purposes of taxation.
Salceda warned that the provision is still vague in terms of hiring procedure, cap on credits, among others.
Former convicts Salceda also said his panel support the passage of a bill that would encourage businesses to hire former persons deprived of liberty (PDL) by granting them tax breaks.
Salceda said that he believes “opportunities to fully integrate into society will lower repeat offenses and help lower crime rate.”