HOUSE Committee on Ways and Means Chairman and Albay Rep. Joey Sarte Salceda has recommended the adoption of Senate Bill (SB) No. 2520, which only modified House Bill (HB) No. 9652, or the Poll Workers Tax Exemption Act.

The House approved its version in August 2021.

In a memorandum to the House leadership, Salceda recommended “the adoption by the House of Senate Bill No. 2520 or the Poll Workers’ Tax Exemption Act.”

The bill was approved on the 2nd reading by the Senate on May 26, 2022, and is expected to be approved on the 3rd reading by May 30, 2022.

“The Committee on Ways and Means recommends adoption, as there is no substantive difference between the Senate and House versions. The Senate version merely clarifies that the exemption shall apply to the May 2022 elections and thereafter,” Salceda wrote.

In subsequent comments, Salceda said, “I am not of the attitude that the government should tax honoraria for election service, especially given the risks of such a job. Election workers did a ‘job well done’ in one of the fastest and smoothest elections in the country’s history. It’s well-deserved tax relief.”

Salceda also explained that under the current tax treatment, the income of the Board of Election Inspectors (BEIs) and other poll workers form part of the taxable income subject to personal income tax under Section 32 of the National Internal Revenue Code amended.

“Most BEIs are public school teachers. Because the lowest salary grade for public school teacher plantilla positions already exceeds the P250,000 exemption under the Tax Code, the entire election honoraria [are] typically subject to the 20% tax rate on marginal income. The Commission on Elections [Comelec] typically withholds this portion of the honoraria already,” Salceda said.

Salceda also explained that “The proposal of both the House and the Senate is to include “honoraria, travel allowance, and such other benefits as may be granted by the Commission on Elections (Comelec) to persons rendering election service pursuant to Section 4 of Republic Act (RA) No. 10756, otherwise known as the ‘Election Service Reform Act’” among exclusions from gross income subject to personal income tax. This would effectively exempt these earnings from tax.”

“There is no difference between the Senate and House versions with respect to the income being referred to. The Senate version merely clarifies that the exemption will apply from the honoraria given during the May 2022 elections onwards,” Salceda added.

Salceda also estimates that “[f]oregoing the 20 percent tax on this amount would be equivalent to a tax revenue loss of 415 million pesos. Considering that elections do not take place every year, this would amount to an annualized revenue loss of around 138.6 million pesos.”

“My committee has run after tax evaders, smugglers, corrupt customs, ecozone, and internal revenue officials, and their accomplices in other agencies. I will not go after election workers, especially given how reasonable the cost of the exemption is,” Salceda remarked.

“It’s a bad look that government will pay the election worker a certain amount, but before you get your hands on it, will cut a fifth of it as tax. The foregone revenue is just one good tax or smuggling raid well done,” Salceda added.

“For this reason, the Committee on Ways and Means will recommend the fastest way forward for this bill, para umabot pa. We strongly recommend adoption by the House, so PRRD [President Rodrigo Roa Duterte] can sign it before his term ends,” Salceda said. By Ryan Ponce Pacpaco