BIR Ruling

October 26, 1971 Mr. Romeo A. Arceno Barrio Bailan Pontevedra, Capiz S i r : In reply to your letter dated February 20, 1971, I have the honor to inform you as follows: aisa dc Travelling expenses, such as per diems and actual transportation expenses of an employee which were subsequently reimbursed shall be included in his gross income and may be deducted as expenses for purposes of income tax. Persons having control of the payment of wages or salaries are authorized to deduct and withhold upon wages withholding tax pursuant to the Withholding Tax Law (Supplement A to Title II of the Tax Code). Accordingly, treasurers, cashiers, disbursing officers and paymasters of government instrumentalities or agencies are authorized to deduct and withhold income tax from salaries of government employees, and are respectively liable for such deductions. Withholding and deduction of income tax shall be made against an employee, i.e., any individual who is the recipient of wages and includes an officer, employee, or elected official of the Government of the Philippines or any political subdivision, agency or instrumentality thereof. It also includes an officer of a corporation (Supplement A to Title of the Tax Code). A sari-sari store operating without first securing tax-receipt is liable to a compromise penalty of P10.00 for every capital investment of P2,500.00 or fractional part thereof, the penalty not to exceed P300.00 (General Circular No. V-240 dated March 15, 1957). For non-issuance of sales invoice or receipt on sales of P2.00 or more to its customers, a sari-sari-store is liable to a compromise penalty of P10.00. The use of the word "cooperative" by a sari-sari store not otherwise registered under Republic Act No. 2023, as amended by Republic Act No. 4362 is a violation punishable under the same Act. cd Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue