JAN.

9, 2012 DATE

NR # 2643
REF. NO.

House panel to look into BIR directive taxing SSS, GSIS, PhilHealth & PAG-Ibig contributions
The House Committee on Ways and Means will look into another controversial issuance of the Bureau of Internal Revenue, Revenue Memorandum Circular 53-2011, which imposes tax on contributions to state pension and insurance institutions like the Social Security System (SSS), Government Service Insurance System (GSIS), Philippine Health Insurance Corp. (PhilHealth) and the PAG-IBIG Fund. The committee arrived at the decision during a recent hearing by approving a motion by Rep. Magtanggol Gunigundo (2nd District, Valenzuela City) to conduct a hearing on RMC 53-2011. The directive issued last November 4, 2011 by BIR Commissioner Kim JacintoHenares taxes optional contributions to pension and insurance firms according to Gunigundo. Gunigundo had earlier criticized the directive as anti-poor and in violation of Section 32 of the Tax Code, which exempts employees contributions from taxation, be it voluntary or mandatory. Gunigundo said those who would be heavily affected would be the overseas Filipino workers and the self and part-time employees, including the domestic helpers. Rep. Rufus Rodriguez (2nd District, Cagayan de Oro City) said he filed House Resolution 1973 directing the Committee on Ways and Means to conduct an inquiry, in aid of legislation, into RMC 53-2011 which would make contributions to pension, housing and health funds amounting to more than that required by law subject to income and withholding tax. Contrary to the BIRs claim, Rodriguez said these contributions cannot be considered investments hence, should not be taxed. These contributions are for social security, not investments, contrary to what theyre saying, said Rodriguez. (30) rbb