BIR Ruling

March 18, 1970 Messrs. Florencio N. Ongkingco Uldarico C. Salveron c/o Social Security System East Avenue, Quezon City Gentlemen : This refers to your letter dated February 6, 1970, stating the following: "On or before the deadline for payment of Professional Tax, the undersigned employees of the Social Security System received an opinion that they need not pay the said tax because they are not exercising the knowledge of their profession in their present positions. The opinion relied upon was bolstered by the Commissioner's pronouncement in the "Daily Mirror" issue of January 20, 1970, to wit: "Exempted from the law are those professionals who are not using their professional knowledge in performing their duties in the government." . . . I. Florencio N . Ongkingco the Manager of the Administrative Department, SSS; is a member of the Philippine Bar. He believe that the opinion given to him to the effect that he is not exercising his profession as Manager of the Administrative Department, SSS, is tenable for the following reasons: 1. The System has its own Legal Department. The Social Security Commission has its own Legal Staff. These two bodies are the exclusive Legal Advisers of the SSS and of the SSC, unlike the other governmental agencies where the Legal and Administrative Departments are combined in one Department; 2. The former occupants of the positions were three (3) teachers and one (1) CPA. This indicates that the position of the Manager of the Administrative Department in the System need not be a lawyer because complex legal provision of law and regulations affecting his work is invariably brought to the Legal Department for opinion and/or interpretation. II. Uldarico C . Salveron the Chief of the Mails & Check Release Division, Administrative Department, SSS, is a CPA. Likewise, he believes in the opinion that he is not exercising the knowledge of his profession as CPA in his present position for the following reasons: acd 1. That the System has its own Accounting, Auditing and Internal Audit Departments and the Mails & Check Release Division is not a division under these Departments mentioned, but under the Administrative Department. In the SSS, the Accounting, Auditing and Internal Audit Departments are the Bookkeepers, Accountants and Auditor of the System respectively; 2. His predecessor is a teacher who has discharged the functions of the same Division from 1962 to 1967 when she retired. This goes to show that the head of the Division need not be a CPA because while it is true that the Division is called upon to keep records of items being mailed, yet the operation involved the compilation of P.O. Registry Listings prepared by another Department, the EDP Department. Incoming mails are received and are routed to Department of destination by messengers. "While the undersigned are of a firm belief that they are not covered by the Professional Tax Law, yet they would like to get the confirmation from the Commissioner whether the opinion given to and adopted by them is correct in the light of the provision of the Omnibus Tax Code. Attached is a concise statement of our duties." Brief but concise statement of duties of the position of the Manager, Administrative Dept . Social Security System, Q . C . "Coordinates and supervises administrative processes to implement the primary functions of the System; reviews and translates recommendations on policies, rules and regulations on personnel administration, methods and training procedures; screens, selects, and assign employees from time to time as the need arises, for and in behalf of the Administrator; directs and coordinates the administration of personnel program of the entire agency; supervises and controls the maintenance of personnel and general records, property control and varied general services of the System; maintains and directs human relations works for the promotion of understanding, goodwill and cooperation between the System and the general public but most particularly among the members of the System; sits as member of the Advisory Staff to the Administrator and performs such other functions as the Administrator may direct." Brief but concise statement of duties of the position of Uldarico C . Salveron, Chief, Mails & Check Release Division, Social Security System, Q . C . "Plans operation of the Division to realize maximum utilization of men and machine-hours; supervises the operation of the division to conform with established procedures and goals; Coordinates the operations of different sections and work units of the Division to realize its smooth functioning through staff conferences to thresh out operational problems and solutions thereto and give proper instructions; conducts inspection to assure production of desired output and results on time; conducts project studies to improve further existing procedures, plans organizational set-up and also studies about capabilities of personnel, machine needs and production; also conduct further studies and report to management." In reply, I have the honor to inform you that based on the foregoing circumstances and on the statement of your duties as Manager and Chief of the Mails and Checks Release Division, respectively, of the Administrative Department of the Social Security System, you do not fall under the classification of professionals in the government service who use or exercise the knowledge of their profession in their employment. Accordingly, you are not required to pay the professional tax imposed under Section 182(B) of the Tax Code, as amended by Republic Act No. 6110, otherwise known as the Omnibus Tax Law. It is further informed that the normal use of the profession in one's employment and not incidental use determines the liability to the professional tax of the employee concerned. cdta Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue