MANILA, Philippines – The Department of Education (DepEd) blamed Congress for failing to exempt teachers’ election pay and allowances from taxes.

At the Laging Handa public briefing on Wednesday, April 6, Education Undersecretary Alain Pascua said that the Bureau of Internal Revenue and the Commission on Elections have both agreed to exempt teachers from paying a 20% withholding tax on their honoraria and allowances on May 9.

“Subalit may batas na kinakailangan i-amend bago maimplement ang exemption at ‘yang amendment sa batas ay hindi nagawa ng Kongreso. Kaya’t hanggang ngayon po ang ating honoraria at allowances ay hindi sila tax-exempted,” said Pascua.

(There is a law that needs to be amended before we can implement the tax exemption, but Congress was unable to pass the amendment. That’s why until now our honoraria and allowances are not tax-exempt.)

Education Secretary Leonor Briones said that the DepEd agreed with the position to make the service pay exempted from taxes so that teachers who will serve as poll workers will “feel the increase in financial assistance.”

Congress is currently on break and will only resume session after the elections, on May 23. To tackle this measure, President Rodrigo Duterte will have to call for a special session.

The Alliance of Concerned Teachers (ACT) had earlier protested the increase, asking the Comelec and the BIR to “exhaust all measures” to stop the imposition of higher taxes.

But the ball is in Congress’ court.

ACT said that even though there was a hike in the election service pay and allowance, the net pay would still be “lower” than in 2019 because of the higher withholding tax. During the 2019 elections, the withholding tax was only 5%.

Under the tax reform law, annual income of over P250,000 but not over P400,000 will be subject to a 20% withholding tax. 

For example, a Teacher I now earns a minimum of P25,439 per month based on the salary schedule for 2022. Because of the Salary Standardization Law, public school teachers across the country are now over the P250,000 threshold.

In August 2021, the House of Representatives had already passed on third and final reading the bill that sought to exempt election pay and allowances from the computation of the gross income.

The counterpart bills are still pending at the Senate committee on ways and means, chaired by Senator Pia Cayetano. – Rappler.com