Should Voluntary SSS Contributions Be Taxed?

Apparently, a genius from BIR came up with the idea of taxing voluntary contributions to SSS, GSIS, Pag-IBIG, and PhilHealth. Contributions subject to tax are those above the mandatory minimum contributions. This started July this year.

By law, these contributions are supposed to be exempt from income taxation but as per BIR, this exemption is being abused and so they rolled out a circular which now imposes tax on these contributions. BIR also pointed out that these contributions which are in excess of the mandatory requirement are actually investments and investments are taxable.

I don’t know what to make of this but one thing is clear: the government wants your money!

It’s just sad because BIR has never shown itself to be an effective government entity. Before it can ask for more money from the people, it should prove that money being taxed is money well spent and invested by the government.

How can people open their minds to increased taxation when they feel that their money is going nowhere?

BIR stated that they are actually suffering from a collection shortfall from the last fiscal year. This only indicates that they are ineffective in their collection efforts. And to make up for this shortcoming, they are devising this scheme to tax voluntary contributions – what the hell!?

Instead of heightening measures to run after big time tax evaders, they are running after the little people. Come on BIR, these people who are voluntarily contributing are small time people who are merely trying to salvage  a secured future for those they may be leaving behind! They are the people who know that they do not have enough riches to hand down to their children and so they need these pre-need plans and assurances so that someday somehow they may have something for their children.

On the other hand,  I believe there should be a positive act from the legislature before taxes can be imposed against these voluntary contributions. The laws that exempt these contributions from taxes are as follows: RA 8291 (GSIS Act), RA 8282 (SSS Law), and RA 9679 (Pag-Ibig Law). These laws, obviously, are enacted by Congress. Only Congress then can amend, revise, repeal, or modify these laws in any other way and NOT by a mere BIR circular.

Anyway, I think someone is cooking to have the said circular debunked. Let’s see what happens next. Until then, I ain’t paying my SSS contribution. I’m a voluntary member by the way.



About the author

Howard Chan (The Student)

Howard considers himself as an armchair activist. Though his street rally days are in a slumber he still advocates changes via social media. He is a strong believer that awareness of various social issues is a good starting point in order to break out from the stranglehold of an oppressive system which only benefits the few. He is also a full time student and a part time blogger, part time web designer, part time web manager/designer for various clients. (Note: Howard Chan passed the 2014 Bar Exams and was admitted to the Philippine Bar on April 29, 2015. That being, all posts after April 29, 2015 authored by him are now under the name Howard Chan for the purpose of distinguishing posts he made as a non-lawyer from posts he made after admission to the bar).


2 pings

  1. LigawTingin

    langyang BIR yan.. ayusin nio muna paggamit pondo ng mamayan bago kau humingi ng pondo ulit.. pucha!

  2. james

    actually, the BIR’s duty is to collect taxes.. the spending is not theirs but of the legislature and of course, the President’s .. so shout at noynoy not the bir

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