BIR Ruling No. 141-12

February 27, 2012 BIR RULING NO. 141-12 R.A. 10071; 000-00 Office of the Provincial Prosecutor Bulwagan ng Katarungan Iba, Zambales Attention: Jorge D. Baculi Provincial Prosecutor Gentlemen : This refers to your letter dated September 8, 2010 endorsed by Revenue District Office No. 18, Olongapo City, requesting clarification as to whether or not the monthly honorarium received by government prosecutors of the Provincial Prosecutors from the Office of the Provincial Capitol of Zambales is subject to income tax. It is represented that you are government prosecutors from the Province of Zambales; that you receive monthly honorarium from the Office of the Provincial Capitol of Zambales; and that the Provincial Capitol subjects the said monthly honorarium to tax. In reply, please be informed that paragraph 9, Section 16 of Republic Act No. 10071 AN ACT STRENGTHENING AND RATIONALIZING THE NATIONAL PROSECUTION SERVICE also known as "Prosecution Service Act of 2010.", provides: "Subject to Section 20 hereof, the salaries and allowances of regional, provincial and city prosecutors and their assistants, and the members of the prosecution staff, including the prosecution attorneys, shall be paid entirely out of national funds and included in the annual appropriations of the DOJ: Provided, however, That this provision is without prejudice to the grant of allowances to the above-mentioned prosecutors by their respective local governments in amounts not exceeding fifty percent (50%) of their basic salaries; Provided, further, That the whole of the allowances or portion thereof, whether granted by the national or local government shall be exempt from the income tax." (emphasis supplied) EaISDC Accordingly, the monthly honorarium in the form of allowance in amounts not exceeding fifty percent (50%) of their basic salaries given by the local government of Zambales is exempt from income tax and consequently from the withholding tax imposed under Section 2.78.1 (A) of Revenue Regulations 2-98, as amended. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue