RMC No. 19-2016 — Clarifies the tax treatment of the Monthly Provisional Allowance and Officer's Allowance given to military personnel/officers under the recently signed Executive Order, entitled "Modifying the Salary Schedule for Civilian Government Personnel and Authorizing the Grant of Additional Benefits for Both Civilian and Military and Uniformed Personnel" Digest | Full Text

1$:35i, i,!' X; g,;n 11,i 4: ?. itl;.f I{EPUBLIC OF TI-IE PH]LTPPINES t u';-"" >c DITPARTN,{trNT OF FINA}ICE i:r$ BUItIi.\ LJ O F INTET{n\, Atr, R.EVE hT U E 1$ ?u.iii., riu ii rl fl 1r,,,4{+.ff* Date: 19 February 2016 n- lb No. REVENL.,E MEMoRANDUM CIRCULAR 7D Subject: Clarifying the 'tr'ax Treatment of the fulonthly Provisional Allowance and Gfficer's Allowance Given to Miliiary Personnel/Officers uslder the Recently Signed Executive Ort*er, entitled "Modifying the Salary Schedule for Civilian Gavernment Personnel and Authorizing the Grant af Additiona! Benefits for Both Civilian and Military and Uniformed Persannel" in Relation to Section 3 of Republic Act (RA) No. 9040 Exempting from lnconne Tax Certain Allowances and Benefits Granted to the f"rlembers of the Armed Forces of the Fhilippines (AFP). Tn : All lnternal Revenue Officers and Others Concerned. An 72 March 2A0L, Congress enacted into law Republic Act (RA) No. 9040, entitled "An Act Exempting from Tax Certain Allawances and Benefits Gronted to the Members of the Armed Forces af the Philippines". Section 3 thereof exempts from income tax certain pay and allowances granted to AFP Personnel, thus: * 'SEC. 3. Exclusions from Gross lncome. The fotlowing pay dnd allowances of AFP personnel shall not be included in gross income and shall be exempt from taxation under Title tl of Republic Act No. 8424, otherwise known as the "Tax Reform Act of 1997',. {a) Langevity pcy, (b) Mandatory *llowonces. namely (1) Cost of Living Allowance; (2) Personnel Economfu Relief Allowance; ond (3) Hazardous Allowance; (c) Collateral Pay, namely (7) Specialist Pay; {2) Combat Pay; (3) Flying pay; (4} Air Mechdnic's Poy; {5) Sea Duty Pay; (6} Hazardous Duty Pay; (7) lnstructor's Duty Pay. (8) Pqrachutist's Pay; and (9) Hordship Pay; and {d) Colloteral All$vtdnces, namely (7) Special Clathing Allowance; (2} Cold Winter's C!othing Allowance and Cald Weather Clothing Maintensnce,frllownnce; {3)Winter Clothing Aliowance; (4) lnitiat F-nlistment qnd Reenlistment Allawance; *nd {S) Laundry Aliavvrnce. .:.., t; f "t-'

On 1.9 February 2A16, ihe President signed an Executive Order (EO), entitled "Nlctdifying the Salary Schedule fcr Civilian Gavernment Personnel ancl Authorizing the Grant oi,4dditionol Benefitsfor Both Civilian and Military an,J l)niformed Personnel. Sections 7 and / I of said EO grant Montlrlr/ Provisionai.qlgryqruq and l4*o,iithlffofficer' to miiitary personnel/offieers as an interim measure until such time that the Base Pay Schedule is rnodified and rationalized. A reading of Section 3 of RA 9040 would readily show that the Monthly Provisional Allowance and Monthly Officer's Allowance given to military personnel/officers pursuant to the recently signed EO are not among those enumerated as exempt from inccme tax under the law. lt is settled that where the law enumerates the subject or condition upon which it applies, it is to be construed as excluding from its effects all those not expressly mentioned, Expressio unius est exclusio olterius. Anything that is not included in the enumeration is excluded therefrom and a meaning that does not appear nor is intended or reflected in the very latrguage of the statute cannot be placed therein.l ln the same vein, tax exemptions should be granted only by clear and unequivocal provision of law on the basis of language too plain to be mistaken. They cannot be extended by mere implication or inference.2 Accordingly, it is hereby clarified that - not being included under the enumeration of pa',, and allowances exempt from income tax under Section 3 of RA 9040 - the Monthiy Provisional Allowance and Monthly Officer's Allowance given to military personnel/officers under the recently signed EO are subiect to income tax. All revenue officers and employees are hereby enjoined to give this Circular as wide a publicity as possible. This Circular shall take effect immediately. BUIir"{U 0F I}RE]INAL RE=\trh1ln |'i-L... ,."" -="" nrionuy. wr, frrr;3IoN KIM S. JACIiWC}-HENARES WY FIB 1s 2il1$ t+ Commissioner of lnternal Revenue ,,3 RECEXV}iY 0 39 1 3 7 San Pablo Manufacturing Corp. v, ClR, G,R. No.147749, June 22, 2006 NPC v. Province of Isabela, G.R. No. 165827,lune 16, 2006