The Supreme Court has ruled that allowances and fringe benefits received by government employees are subject to withholding tax.
Voting unanimously during its en banc session on Tuesday, the SC denied the petition filed by the Confederation for Unity, Recognition and Advancement of Government Employees (COURAGE), and several associations of Regional Trial Court judges both in Manila and Iloilo City challenging the legality of the Bureau of Internal Revenue’s Revenue Memorandum Order (RMO) 23-2014.
“The Court, voting unanimously, ruled that all income received by an employee from his/her employer are presumptively taxable and subject to withholding; and the government, as an employer, has the duty to withhold and remit the proper taxes due thereon,” the high court said in a decision.
“An employee who claims exemption from withholding taxes has the burden to prove the factual and legal bases of the claim in the proper administrative and judicial proceedings,” the SC added.