24, 2013

NR # 3025

Solon opposes plan to impose tax on Pag-IBIG, SSS, GSIS and PhilHealth contributions
A lawmaker has moved to stop the Bureau of Internal Revenue (BIR) on its plan to impose an income tax on Pag-IBIG, Social Security System (SSS), Government Service Insurance System (GSIS) and PhilHealth contributions. “The existing laws states that all contributions collected, income or investment earnings shall be exempted from any tax, assessment or fee,” said Rep. Rodolfo Valencia (1st District, Oriental Mindoro), author of House Resolution 2982. According to Valencia, who chairs the House Committee on Housing and Urban Development, “no tax measure of whatever nature enacted shall apply to the fund and any tax assessment against the fund shall be null and void.” “While it is true that collection of taxes is of paramount importance, the imposition and collection of taxes should not be to the detriment of the other policies and programs of the government,” Valencia added. Valencia said the tax-exemption granted to all contributions to the fund is one of the best selling points of Pag-IBIG’s voluntary savings program and repealing it will impact negatively on the Fund’s objective as a savings generation and home-building program. “Relying mainly on the mandatory contributions required by law would endanger the fund’s ability to provide massive financing for housing while encouraging additional voluntary contributions from its members is not only necessary for its nature as a savings program but is also imperative to sustain the fund’s housing mandate,” Valencia said. Valencia said Republic Act 9679 or the Home Development Mutual Fund Law was enacted to provide, among others, an integrated nationwide provident system and mobilize funds for shelter finance, after more than a decade of meticulous study in cognizance of the need for the government to provide massive financing for housing. “The more members contribute to the Fund, the more the Pag-IBIG Fund contributes to the accomplishment of the targets of the Government’s National Shelter Program,” Valencia said. Valencia said the Pag-IBIG 2 Savings Program created to ensure sustained shelter finance, encourage more savings, and to cater at the same time to the needs of Pag-IBIG Fund members contributing the mandated P100 monthly contribution but who want to avail of housing loans beyond the allowable loanable amount, corresponding to their P100

monthly contributions. Valencia said the Pag-IBIG fund has grown to become the biggest single source of home financing in the country, disbursing a total of P195.6 billion for home lending from 2001 to August 2010 corresponding to 401,242 housing units constructed, and contributing 46 percent of the aggregate portfolio for residential real estate loans as of year-end 2010. “The accomplishment was achieved at no cost to the government as no government money was ever infused into the fund but was made possible almost exclusively through both mandatory and voluntary contributions of its members throughout these years,” Valencia said. The BIR said the voluntary contributions in excess of what the law allows of SSS, GSIS, PHIC and HDMC are not excludible from the gross income of the taxpayer and, not exempt from Income Tax and Withholding Tax. (30) jc

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