Judges urge SC to strike down taxes on benefits

Posted at 08/21/14 6:56 PM

MANILA - After the Judiciary Employees Association (Judea) and other state workers under the Confederation for the Unity, Recognition and Advancement of Government Employees (Courage), it's now the turn of Regional Trial Court (RTC) judges to question before the Supreme Court (SC) the Bureau of Internal Revenue's (BIR) move to subject to withholding tax their allowances and benefits.

In a petition for certiorari and prohibition, the RTC Judges Association of Manila, represented by its president, Judge Armando Yanga, urged the high court to strike down BIR Revenue Memorandum Order (RMO) No. 23-2014 as unconstitutional "because it contravenes their (judges') right to due process of law and violates the guarantee of independence of the judiciary."

"[T]he petitioners respectfully maintain that even if the Special Allowances under RA No. 9227 (An Act Granting Additional Compensation in the Form of Special Allowances for Justices, Judges, and All Other Positions in the Judiciary with the Equivalent Rank of Justices of the Court of Appeals and Judges of the Regional Trial Court) are considered as fringe benefits under Section 33(A) of the [National Internal Revenue Code], they are nonetheless not subject to any final withholding tax because the grant thereof is indisputably necessary to guarantee the independence of the Judiciary and to ensure impartial administration of justice as emphatically set forth in the Declaration of Policy of the law," the petition read.

The judges insisted that the special allowances and benefits provided under RA No. 9227 are "considered fringe benefits under the [NIRC] not subject to any Fringe Benefits Tax."

The judges urged the issuance of a temporary restraining order (TRO) to prevent BIR Commissioner Kim Henares and all agents of the bureau from implementing the RMO.

In last Tuesday's en banc session, the high court directed the BIR and Department of Finance to respond to the earlier petitions for a period of ten days.