BIR conducts on-the-spot verifications on withholding tax compliance

Sunday 13th of November 2011

CAGAYAN DE ORO CITY, Misamis Oriental, Nov. 13 (PIA) –- On the spot verifications to ascertain that the applicable regulations on Withholding Tax are fully complied with is now being conducted by the Bureau of Internal Revenue (BIR), Revenue District Office No. 98, this city.

This measure is done to intensify BIR’s efforts to achieve its collection target for taxable year 2011, Samson Q. Carcueva, Jr., Officer-in-Charge of RDO 98, said.

Carcueva said it has been observed that some local government units (LGU’s) and government agencies and instrumentalities (GAI’s) failed to deduct and remit the correct withholding taxes on compensation of their employees and government money payments.

To regulate, BIR is compelled to initiate measures to strictly monitor their adherence to Revenue Regulations No 2-98, as amended, and other existing withholding tax regulations.

Thus, RDO 98 has called on all government withholding agents, in its area of coverage, to accurately withhold, perform year-end adjustments, in accordance with Revenue Memorandum Circulars (RMC) No. 21-2010 and No. 23-2007and Revenue Regulations (RR) No. 10-2008, to avoid unnecessary penalties including administrative sanctions and even criminal charges.

Meanwhile, Carcueva emphasized that the 13th month pay and other benefits, in excess of the statutory amount of P30,000, are subject to withholding tax.

For compensation earners in the government sector, these excesses include the year-end bonus received by employees of the local government units (LGU’s) and government agencies and instrumentalities (GAI’s).

Pursuant to a recent Revenue Memorandum Circular (RMC) No. 27-2011, voluntary contributions in excess to what the law allows are no longer excludible from the gross income of the taxpayer, hence, it is not exempted from income and withholding tax.

Consequently, the exemption from withholding tax on compensation referred to in Section 2.78.1 (b)(12) of RR 2-98 shall apply only to mandatory/compulsory contributions of the Government Service Insurance System (GSIS), Social Security System (SSS), Medicare and Pag-Ibig contributions.

Further, per Revenue Regulations No. 2-2006, all withholding agents are strictly required to submit the Monthly Alpha list of Payees (MAP) in electronic, hard and soft copy, as attachment to BIR Form No. 16001-E and BIR Form No. 1600.

Incidentally,Carcueva said the applicable penalties for non-compliance with existing tax laws and regulations relative to withholding taxes are as follows:

Additions to the tax, in the form of penalties or interest per Section 249, 252 and 255 under Title X, Chapter 1 of the Tax Code, as amended.

Criminal liablitilies in the form of fine or imprisonment or both, per sections 255 and 272 of the Tax Code, as amended.

For further assistance, you may visit RDO 98 at the Ground Floor, BIR Building, Westbound Terminal, Bulua, Cagayan de Oro City, or call (08822) 711-6437 , local 104 or better still,visit website www.bir,gov.ph for easy reference to the full text of the pertinent regulations on this matter. (PIA-10)