MISAMIS Oriental Governor Yevgeny Vincente Emano on Monday, July 10, directed the Provincial Administrator's Office and the Legal Division to study an order of the Bureau of Internal Revenue (BIR) that allows the government to tax the lowest-paid government employee by up to 13 percent.
"It's stupid," Emano said regarding the BIR’s memorandum circular 130-2016.
According to BIR, the circular allows for the withholding of taxes of services contractors or job orders.
The circular clarified that government personnel hired under job-order arrangements are not employees of the government, and are, thus, considered as service contractors, who are taxed differently on the remuneration they receive for rendering the services.
Currently, government employees, who are nonprofessionals are taxed either as a value-added tax (VAT)-registered taxpayer or as a service contractor required to pay a 3-percent withholding tax on money payments received from the government.
"I cannot understand, treating job orders as businessmen? I cannot fathom the basis of this circular. The job order employees, who receives the lowest salary, should not be taxed in any way," he said.
"It's illogical, we have so many big companies that do not pay taxes, these are what should the government run after," he added.
The job order employees in the Capitol receive P8,000 per month.
Emano said they will contest the tax order and suspend the implementations of this law.
