/ 5 August 2021

THE HOUSE of Representatives has approved on 2nd reading a measure that will exempt from taxes the honoraria, allowances and other financial benefits of those who render service during elections, including teachers.

House Bill 9652 was sponsored by ACT Teachers Partylist Rep. France Castro.

The measure introduces an amendment to the National Internal Revenue Code of 1997 that seeks to exclude election-related honoraria and allowances from the computation of gross income.

In her sponsorship speech, Castro explained that RA 10756 or the Election Service Reform Act increased the honoraria and other allowances of poll workers.

However, BIR Ruling 759-18, which considered election compensation as taxable income, runs counter to the intent and objective of the law to compensate those who work during elections.

Under the BIR ruling, teachers will have to pay income tax if their annual taxable income, which includes such honoraria and allowances, exceeds P250,000.

“To emphasize, there should be no change in the computation of such honoraria and other compensation for election services as ESRA is silent as to the tax treatment of said amounts.  Also, said amounts have never been subjected to income tax prior to the passage of ESRA,” Castro said.

“It must be noted that the volunteer poll workers exhaust their honoraria and allowances for travel, food and other expenses before, during and after election to perform election-related tasks and are even forced to spend their personal funds to effectively and efficiently carry out their functions,” she stressed.

She said that exempting the compensation of poll workers from taxes “will not result in serious erosion of government revenues.”