Deduction on traffic aides' salaries lawful
The head of the traffic aides or auxiliaries in Iloilo City has justified the forthcoming imposition of a withholding tax on the salaries of traffic aides.
Roque Tancinco in a phone interview with The News Today said the impending deduction was explained to the traffic aides in a dialog with representatives from the City Budget Office and Bureau of Internal Revenue (BIR) last Saturday.
Tancinco said, traffic aides are classified under "job order" work category and their salaries are subject to withholding tax.
An amount of P444.00 will be deducted to the salaries of traffic aides every month starting May 15, 2007 (not yet implemented as reported earlier).
Traffic aides and auxiliaries under the Traffic Management and Engineering Unit are receiving P5,000 salary from the city government. They don't have allowances.
The city had just given them a raise P500 in their monthly salaries, but with the P444 deduction it would be like they would be having the same take home pay.
Tancinco, however, said they are still negotiating if the traffic aides could be exempted from paying the withholding tax.
If that happens, Tancinco said, traffic aides would only be paying their annual tax income.
They have to pay the annual tax income because they have an annual income of P60,000, Tancinco said.
Chapter 13, Section 79 of the Internal Revenue Code states that the law requires that every employer making payment of wages shall deduct and withhold upon such wages a tax determined in accordance with the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner: Provided, however, That no withholding of a tax shall be required where the total compensation income of an individual does not exceed the statutory minimum wage, or five thousand pesos (P5,000.00) per month, whichever is higher.