BIR Ruling

July 6, 1972 Mr. Samuel L. Rabanillo Manager, Tarlac Branch, Dev. Bank of the Philippines Tarlac, Tarlac S i r : This refers to your letter dated April 30, 1970 requesting information on a query stated as follows: "Three of our employees here in Tarlac Branch verbally requested through our personnel in-charge of payroll, to deduct from their salaries, the withholding taxes due from them, but at a reduced amount and this had been done for quite sometime. In other words, the amount they would want deducted as withholding tax should not be in accordance with the schedule. "Upon learning of this, we immediately caused the correct deduction pursuant to the BIR schedule. "May we please inquire from your good office the correct deduction pursuant to the BIR schedule. "May we please inquire from your good office if we may consider such request?" In reply, I have the honor to inform you that the above request of your employees should not be granted. The amount that should be deducted as withholding taxes should be strictly in accordance with the withholding tables set forth under Revenue Regulations No. V-8, of the Department of Finance, as amended by Revenue Regulations No. V-70, and further amended by Revenue Regulations No. 1-69, which took effect on January 1, 1968. This is in line with the following provisions of Supplement A-Withholding on Wages, viz: "ART 2. Income tax collected at source (a) Requirement of withholding. Every employer making payment of wages shall deduct and withhold upon such wages a tax determined in accordance with a withholding table to be prepared by the Secretary of Finance." "(b) Tax paid by recipient . If the employer, in violation of the provisions of this supplement, fails to deduct and withhold the tax as required under this supplement, and thereafter the tax against which such tax may be credited is paid, the tax so required to be deducted and withheld shall not be collected from the employer; but this subarticle shall in no case relieve the employer from liability for any penalties or additions to the tax otherwise applicable in respect of such failure to deduct and withhold." xxx xxx xxx "ART. 7. Surcharges for failure to render returns ; delinquency in payment of taxes . The surcharges prescribed in section seventy-two of this Title in cases of failure to render returns and for filing false or fraudulent returns shall apply to the returns required under Articles four and five. In case the taxes deducted and withheld by the employer are not paid within the time prescribed, there shall be added a surcharge of five per centum on the amount of tax unpaid and interest at the rate of one per centum a month upon the amount required to be paid from the time the same became due until paid." cdt Article 4 of the same Supplement provides that such taxes deducted and withheld by the employer on wages of employees shall be covered by a return and paid to the Government. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue