Catipay - Case Study #1

NAME: CATIPAY, JEFRAI D.
SECTION: BSBA-2C
SUBJECT AND SCHEDULE: BA 122 (5:30-7:00) DATE: APRIL 22,2022
CASE STUDY # 1
Attorney. Bernardo Zialcita
I. BACKGROUND AND RATIONALE
 In the instance of Attorney Atty. From March 13, 1962 to February 15, 1990, he
worked for the government as Zialcita. He achieved the mandatory retirement age of
65 years the next day, on February 16, 1990. He is entitled to a commutation of his
accumulated leave credits to money value upon his compulsory retirement.
Compulsory retirement may be regarded a "reason beyond the control of the
aforementioned official or employee" under the NLRC's above-mentioned rules. As a
result, the amount he received in commutation of his accrued leave credits as a result
of his mandatory retirement, or his terminal leave pay, falls within the listed
exclusions from gross income and is thus tax-free. When a government employee
chooses to come to work rather than take time off and use up his or her vacation time,
there is little doubt that the government benefits from the person's ongoing and
uninterrupted service. In recognition of this, legislation was passed allowing retired
government employees, among others, to have their accumulated leave credits
commutated. The money he receives after retirement is a gift from the government as
a thank you for continuing to work when he might have taken a holiday. It is a simple
reward granted by the government in exchange for or in honor of good services, and it
stems from the government's gratitude and graciousness. When any officer, employee,
or laborer of the Government of the Philippines shall voluntarily resign or be
separated from the service through no fault of his own, he shall be entitled to the
commutation of all accumulated vacation and/or sick leave to his credit. Because it is
paid solely upon retirement and in acknowledgment of the retiree's excellent services,
the conversion of accrued leave credits may be deemed a retirement gratuity.
II. PROBLEM INDENTIFICATION
 Attorney compensations for his final leave. Zialcita got as a result of his obligatory
separation can never be deemed a portion of his wage subject to income tax, but it
does fall under the phrase other similar advantages obtained by retiring employees
and workers. They cannot anticipate all variables affecting the rights of government
employees of all categories and from various offices at this time and in all cases. Each
matter will have to be determined and decided by the relevant authorities when it
occurs. Similarly placed is a vague and indeterminate expression whose applicability
cannot be predicted ahead of time.
III. ALTERNATIVES SOLUTIONS TO THE ABOVE PROBLEM
 The Commissioner of Internal Revenue filed a request for clarification and/or

reconsideration with this Court as an intervenor-movant and through the Solicitor
General. The "Budgetary Reform Decree on Compensation and Position
Classification of 1976, makes it clear that the actual service is the period of time for
which pay has been received. Excluding the period covered by terminal leave. As a
result, the Court decided to order the Office of Fiscal Management and Budget to
refund Attorney. They declare that no withholding tax shall be deducted by any
Office of this Court from the terminal leave pay benefits of all retirees similarly
situated, including those who have already retired and from whose retirement benefits
such withholding taxes were deducted. Any government officer or employee who
retires, voluntarily resigns, or is separated from the service due to no fault of his own
and whose leave benefits are not covered by special law. Shall be entitled to the
commutation of all accumulated vacation and/or sick leaves to his credit, exclusive of
Saturdays, Sundays, and holidays, without litigation as to the number of days of
vacation and sick leave that he may accumulate. Terminal leave is the term for the
commutation of leave credits. Terminal leave is sought for by an officer or employee
who quits, resigns, or is removed from the service due to no fault of his own. Because
an officer or employee who has already broken his link with his employer and is no
longer working applies for terminal leave, the terminal leave pays, which is the cash
value of his accrued leave credits, is no longer compensation for services done. It
cannot be considered a wage.
IV. CONCLUSION
 Officials and workers who retire under the Act are entitled to a commutation of any
unused vacation or sick leave credits they may have at the time of retirement,
depending on the highest rate received. The statute clearly reflects the government's
gratitude for many years of service already provided. As well as the evident purpose
to reward loyal and frequently underpaid employees after the formal connection has
ended. Throughout their working careers, all salaried workers and wage earners.
Whether in the public or private sector, are taxed to the last centavo of their earnings.
Factory employees, business executives, merchants, self-employed professionals,
movie stars, fishing magnates, bus and jeepney operators, vice lords, theater owners,
and real estate lessors, to name a few, do not share this sentiment. Even as his cost of
living, age, health, and other personal circumstances call for increasing spending. The
middle or lower employee who retires after thirty or forty years of service sees his
retirement pensions or benefits inexorably and swiftly fall in value in only a few
years.
V. RECOMMENDATION
 Retirees, who are most deserving of compassion and who are least able to bear the
government's many duties. They should not be burdened by a strained interpretation
of the law. Retirees, who are most deserving of compassion and who are least able to
bear the government's many duties, should not be burdened by a strained
interpretation of the law. The taxing terminal leave compensation would result in the
taxation of benefits received later and as a direct result of retirement, resulting in
double taxation. This resolution also applies to those who take advantage of optional
retirement and those who resign or are separated from the military due to
circumstances beyond their control.

Catipay - Case Study #1

Uploaded by

Copyright:

Available Formats

Catipay - Case Study #1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Catipay - Case Study #1

Uploaded by

Copyright:

Available Formats

NAME: CATIPAY, JEFRAI D.

SUBJECT AND SCHEDULE: BA 122 (5:30-7:00) DATE: APRIL 22,2022

Attorney. Bernardo Zialcita

I. BACKGROUND AND RATIONALE

III. ALTERNATIVES SOLUTIONS TO THE ABOVE PROBLEM

 The Commissioner of Internal Revenue filed a request for clarification and/or

You might also like