Mrs. Lourdes Veloso-Mastura

January 27, 2009 BIR RULING [DA-(OSL-001) 049-09] R.A. 9257; RR No. 04-2006 Mrs. Lourdes Veloso-Mastura Metro Cotabato Water District Gov. Gutierrez Avenue, Cotabato City Madam : This refers to your letter dated September 28, 2008, received by this Office on October 6, 2008, requesting exemption from withholding income tax under Republic Act No. 9257 otherwise known as the "Expanded Senior Citizens Act of 2003". SEIcAD It is represented that you retired in 1995 and has been serving as member of the Board of directors of the Metro Cotabato Water District (MCWD); that for every meeting, a board member, you receive a per diem of Five Thousand Five Hundred Twenty pesos (P5,520.00); that you have no other income other than the said per diem as member of the board of directors; that as a senior citizen, you are requesting for exemption from 20% withholding tax; and that in support of your request, you have attached a certification from MCWD as to the amount of per diem received and photocopy of your Senior Citizen's Identification Card issued by the City of Taguig. In reply, please be informed that Section 3 (c) of Republic Act (R.A.) No. 9257 1 grants senior citizens exemption from the payment of individual income tax, to wit: "SEC. 3. Income Tax Benefit and Privileges for the Senior Citizens. Senior citizens shall be entitled to the following tax benefits and privileges: (a) . . . (c) Exemption from the payment of individual income taxes; Provided, That their annual taxable income does not exceed the poverty level as determined by the National Economic and Development Authority (NEDA) for the corresponding taxable year ." (Emphasis supplied). The current poverty thresholds as provided by the National Statistical Coordination Board are as follows: 2006 Poverty Threshold 2007 Poverty Threshold Region/Province (in PhP) (in PhP) All areas Urban Rural All areas Urban Rural Region XII 13,593 15,631 12,789 14,104 16,212 13,273 North Cotabato 13,045 15,202 12,671 13,441 15,734 13,044 Saranggani 13,483 16,099 13,044 13,980 16,661 13,531 South Cotabato 14,136 15,530 13,235 14,777 16,136 13,897 Sultan Kudarat 12,990 15,934 12,270 13,446 16,480 12,703 Cotabato City 2/ 15,649 15,649 16,242 16,242 For more information regarding the current poverty thresholds, please go to the website of NSCB at www.nscb.gov.ph and click "poverty" or call telephone no. 896-79-81. ACcEHI Pursuant to Section 4 of RR No. 4-2006, the senior citizen's exemption shall be determined by the Revenue District Office (RDO) having jurisdiction over the place where the senior citizen resides by submitting a certified true copy of his Senior Citizen Identification Card (OSCA ID) issued by the Office for Senior Citizens Affairs (OSCA) of the city or municipality where he resides. He must file an Annual Information Return (in lieu of the Income Tax Return) indicating that his annual taxable income does not exceed the poverty level as determined by the NEDA through the National Statistical Coordinating Board (NSCB) through a formal written document sent to the Commissioner of Internal Revenue for this year and every year thereafter. If qualified, his name shall be recorded by the RDO in his Master List of Tax Exempt Senior Citizens for that particular year, which the RDO is mandatorily required to keep. In your case, you represent that you receive P5,520 per meeting with at least two (2) meetings in one month, that is at least P11,040 per month or at least P132,480 annual gross income. Thus, it is most likely that your annual taxable income exceeds the poverty level for 2007 set by NEDA through the NSCB, and therefore subject to income tax as well as withholding tax. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service Footnotes 1. Amending R.A. 7432, "Act to Maximize the Contribution of Senior Citizens to Nation Building, Grant Benefits and Special Privileges and for Other Purposes". HaTAEc