Sponsorship speech on Senate Bill No. 2520, exempting election honoraria and allowances from income tax
By Senator Pia S. Cayetano
Chairperson, Committee on Ways and Means

Mr. President, distinguished colleagues, today, I rise to sponsor and seek your support for the passage of Senate Bill No. 2520, under Committee Report No. 641, which seeks to exempt from income tax the election honoraria and allowances of persons rendering services during an election period.

Aside from performing the noble task of educating the youth, teachers also have an additional role during elections. They are called to man the polling precincts in order to protect the sanctity of every ballot and facilitate the conduct of peaceful and clean elections.

Pursuant to Republic Act No. 10756 also known as the Election Service Reform Act, the said task is not only limited to our teachers, as the COMELEC may also appoint other persons to serve during elections, including DepEd non-teaching personnel.

Based on DepEd's records, about 647,812 of its personnel rendered service in the recently held 2022 national and local elections. An estimated 319,317 public school teachers sat as Electoral Board members and a number of DepEd personnel served as supervisory election officials.

Per the Election Service Reform Act, they are entitled to honoria, travel allowance, and such other benefits that may be granted by the COMELEC.

For this year, based on COMELEC Resolution No. 10727 (s. 2021), the persons who manned our polling precincts will receive the following:

•  Honorarium;

•  Travel Allowance;

•  Anti COVID-19 Allowance; and

•  Communication Allowance

According to the Alliance of Concerned Teachers (ACT), Chairpersons of the Electoral Boards and Poll Clerks also received an additional P1,000 to P2,000 travel allowance for training, which was already released to them.

Per ACT, election workers, depending on their position (Chairperson, Electoral Board Members, Technical Support Staff, etc.) should receive a gross compensation of P4,500 to P12,000.

However, with the imposition of the 20% withholding tax, they will only receive around P3,600 to P9,600 for the services they rendered during the 2022 elections.

Historically, election honoraria and allowances were not taxed.

But the BIR had ruled that such were compensation that should be subjected to tax and, consequently, to withholding tax.

And so, in the 2018 Barangay and Sangguniang Kabataan Election and in the succeeding 2019 Midterm Election, these were subjected to 5% professional fee withholding tax.

Now, in the 2022 election, the BIR issued another ruling that since election duties are not a practice of a teacher's profession, the previous 5% professional fee withholding tax would no longer be applicable, thus, subjecting election honoraria and allowances to 20% withholding tax on compensation.

Ang hiling ng ating mga guro at ng iba pang nagbibigay ng serbisyo tuwing eleksyon, huwag na silang buwisan dahil napakabigat na ng trabahong kanilang ginagampanan.

This measure is a small show of support to our teachers and non-teaching personnel for the services they render, considering that elections are special circumstances that do not happen annually.

On that note, Mr. President, I submit this bill to the wisdom of the Senate. Thank you, Mr. President.