Discriminatory travel allowance tax

Ahead of the May elections, members of the Alliance of Concerned Teachers are protesting the plan of the Commission on Elections (Comelec) to impose a 20-percent tax on the P2,000 travel allowance of school teachers who will serve in the polling precincts.

In the last elections, that allowance drew a 5-percent tax. If Comelec goes through with the 20-percent tax deduction, the net travel allowance will be P1,600.

The allowance is meant to cover the expenses that the teachers would incur in commuting to and from their place of residence to their assigned precincts and, after the polls close, to the local government offices to return the election materials.

For the teachers, any savings they may be able to get from the allowance by carpooling or other cost-saving arrangements represent extra income. The P400 deduction is not something to sneeze at in this economically depressing times.

That allotment is akin to the “representation and transportation allowance,” or RATA as it is commonly called, that select government employees are given under existing regulations.

It was conceived “to cover related expenses incidental to and in connection with the actual performance of their respective functions.” In the process, at least in theory, it would make them more efficient or diligent in the performance of their duties and responsibilities.

The RATA, in so far as the transportation portion is concerned, is comparable to the travel allowance that private employers give to their employees who, by their job description, have to move around or work outside of the office.

Depending on the employer’s policies, that money is later accounted for through receipts or by an enumeration of the places the employee went to in the course of his or her work.

But the similarity ends there.

By the standards of the Bureau of Internal Revenue (BIR), the RATA is considered a fringe benefit that is tax-free.

A fringe benefit is any good, service or thing of value that is given in cash or in kind by an employer to its employee in addition to his or her compensation.

As a rule, everything that an employee receives from his or her employer on account of or by virtue of the employment is subject to tax, unless otherwise exempted by law or the BIR.

The BIR’s rationale for the RATA’s tax-free status reads: “Fringe benefits, however, which are required by the nature of or necessary to the trade, business or profession of the employer or where such fringe benefit is for the convenience and advantage of the employer shall not be subject to the fringe benefit tax.”

It’s a different story for private employees. Their travel allowance will be tax-free only if (a) the expenses are necessary or common to the trade, business or profession; and (b) the employee is obliged to liquidate those expenses.

The question is posed: Does the travel allowance of the teachers who will serve in the May elections meet the criteria of a fringe benefit that, under existing BIR regulations, is entitled to tax-free treatment?

The answer is a resounding YES. The P2,000 is necessary to enable the Comelec perform its mandate to conduct honest and peaceful elections.

It is also to its advantage that the teachers have the money needed to enable them to report to their assigned precincts hours before the start of the elections so they can make the proper preparations.

And that after a grueling day attending to the voters, including dealing with pesky representatives of candidates, preparing the closing documents and submitting them to the proper government officials, they would be able to go home and rest without any money worries for their transportation.

Lest we forget, poll duty with its attendant risks to life and limb is not an integral part of a teacher’s responsibilities.

They are, in effect, being conscripted by the Comelec for that task because they are perceived to be nonpartisan and can be trusted to do their work honestly and efficiently.

Will the Comelec and the BIR please give them a break on their measly travel allowance? INQ

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