MANY Capitol employees and department heads are complaining of the tax deductions from their P15,000 cash incentive, saying they have been robbed of the spirit of Christmas.
Some of them did not receive their incentives as these were not enough to cover their taxes, while others got negative figures, which means they still owe the government taxes.
Provincial Accountant Marieto Ypil explained that the taxes imposed on the employees were due to their overtime pay, which covers 150 percent of their monthly salaries, and the four bonuses, including the P15,000 incentive, they received this year. The other bonuses were the 13th month pay, productivity enhancement incentive and the collective negotiation agreement.
Ypil said these compensations resulted in the change of their tax bracket from 20 percent to a higher 22, 25 or 30 depending on the amount each one received up to the highest 32 percent bracket.
According to the tax table, if the taxable income is over P70,000 but not over P140,000 the tax due is P8,500 plus 20 percent of the excess P70,000.
For those getting P500,000 and above, the tax due is P125,000 plus 32 percent of the excess of P500,000.
Ypil said that the tax due on overtime pay was not deducted since the beginning of the year, so there was shortage of tax collected from the employees.
The Accounting Office deducted the uncollected taxes from the P15,000 incentive of the employees to cover the tax shortage.
For employees whose tax due is higher than their recent bonus, Ypil said they agreed to settle it next month.
When asked to comment on the employees’ sentiment, Ypil said that no one is exempted from paying taxes.
Gov. Hilario Davide III said that before the release of the bonuses, Capitol already explained the matter to the officials of the Provincial Employees Association of Cebu for the organization to explain the tax deduction to their members.
Vice Gov. Agnes Magpale said she already told the Accounting Office to deduct a bigger amount from her monthly pay to shoulder any increase in her tax due at the end of the year.