BIR Ruling

July 7, 1972 Hon. Leonides S. Virata Chairman Development Bank of the Philippines P. O. Box 800 Makati Commercial Center Makati, Rizal S i r : This refers to your letter to the Honorable, the Secretary of Finance, Manila, dated March 14, 1972 requesting that the DBP be permitted to remit withholding and contractor's taxes on the gross income and receipts of Pemar Engineering, Inc. and its foreign personnel for the period covering September, 1971 to February, 1972 without being subjected to surcharges, interest and other penalties imposed for late payment of said taxes. In reply, I have the honor to inform you that your request cannot be granted for lack of legal basis. The provisions of the Tax Code relative to the imposition of surcharges, interest and other penalties incident to the payment of withholding and contractor's taxes on gross income and receipts are mandatory. They provide a plan which work out automatically and confer no discretion on the Commissioner of Internal Revenue to extend the time prescribed for the payment of such taxes. (See Lim Co Chiu vs. Posadas, 47 Phil. 460). Thus, it has been held that laws imposing penalties for delinquencies are clearly intended to hasten tax payments or to punish evasions or neglect of duty in respect thereof. If delays in tax payments are to be considered for light reasons, the law imposing penalties for delinquencies would be rendered nugatory, and the maintenance of the government and its multifarious activities would be as precarious as taxpayers are willing or unwilling to pay their obligations to the State on time. The imperatives of public welfare will not approve of this result. (Celso B. Jamora and Asuncion M. Jamora vs. Bibiano L. Meer, 74 Phil. 22). cdti Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue