Payment of Gratuity under RA Act. No. 1616

November 17, 1960 BIR RULING NO. 491-60 2nd Indorsement Returned to the Finance Officer, B.I.R., Manila the herein papers pertaining to the request of former Commissioner Jose Araas for payment of his gratuity under Republic Act. No. 1616. It appears that the retirement of former Commissioner Araas under Republic Act No. 1616 was duly approved and he should receive, in accordance with his election, a gratuity equivalent to his salary for two (2) years, or P18,000.00. It also appears that he is being investigated under the provisions of Republic Act No. 1379. However, this law does not prohibit payment of gratuity due to persons whose property acquisitions are being inquired into under its provisions. Even upon conviction, the penalty does not carry with it the loss of retirement benefits or gratuity given under any law. Moreover, Republic Act No. 1379 refers to proceedings concerning unlawfully acquired property of an employee acquired during his incumbency, the penalty of which is forfeiture of said property in favor of the State. Obviously, the gratuity given to an employee under R.A. No. 1616 which is in the nature of compensation for past services rendered, constitutes a lawful income of such employee, which will not in any way be affected by the result of the proceedings. It may be stated that R.A. No. 1616, a later enactment, contains no provision prohibiting payment of gratuity granted therein if the retiring employee is charged under R.A. No. 1379. There is, therefore, no legal impediment for the payment of the gratuity in question. LLjur Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue