Exemption from the GSIS Premium, Medicare, Withholding Tax and Other Similar Deductions
BIR Ruling No. 155-89 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Jul 25, 1989
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July 25, 1989 BIR RULING NO. 155-89 21 (a) 000-00 155-89 S i r : This refers to your 1st Indorsement dated May 23, 1989 addressed to Her Excellency, President Corazon C. Aquino which was referred to this Office by the Honorable Secretary of Finance requesting that the Christmas bonus and P1,000 cash gift given to government employees should not be included in the computation of their income tax. In reply thereto, I have the honor to inform you that your request is hereby denied for lack of legal basis. Pursuant to paragraph 4.0 (4.9) of the National Compensation Circular No. 54 dated December 14, 1988 the "year-end benefits" consisting of "year-end bonus and cash gift" granted to National Government officials and employees shall not be subject to GSIS premium, Medicare, Withholding tax and other similar deductions. However, said year-end benefits shall be reported as taxable income in filing income tax returns. Accordingly, the year-end bonus and cash gift should be included in the taxable income of the government employee in computing their income tax liability. cd Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner
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