BIR Ruling [DA-211-99]

April 5, 1999 BIR RULING [DA-211-99] Ms. Perla B. San Juan Chief Accountant Marsman & Co., Inc. 2F Kings Court II Building Pasong Tamo, Makati City M a d a m : This refers to your letter dated August 21, 1997 requesting for the waiver of surcharge and interest for your failure to pay on time the second installment, of the income tax liability of Mt. Yoshinobu Nishida amounting to P80,956.26. It is represented that Mr. Yoshinobu Nishida (Mr. Nishida) is a Japanese expat employed with the Philippine Regional Office; that he was required by the Internal Revenue Office in Japan to pay the corresponding taxes of his other income earned in Japan; that the surcharge and interest were incurred due to the fact that Mr. Nishida was out of the country during the time payment was due; that it was only your first time to make such type of payment; that you made an assurance to this Office that such delays will not be encountered by this Office on your future payments and that you are earnestly requesting for waiver of surcharge and interest since said amount will be deducted from your salary. In reply, please be informed that the obligation to pay interest and surcharge under the Tax Code is mandatory. (Commissioner of Internal Revenue vs. Limpan Investment Corporation, L-28644 dated July 31, 1970) The surcharge and interest respectively imposed under Sections 248 (b) and 249 (a) of the Tax Code, as amended, (also Section 248 (B) and 249 (A) of the Tax Code of 1997), are but just compensation to the state for the delay in paying the tax and the concomitant use by the taxpayer of funds that rightfully should be in the hands of the government. (Central Azucarera de San Pedro vs. Court of Tax Appeals, 20 SCRA 345, Castro vs. Collector of Internal Revenue, 6 SCRA 886) LLpr Such being the case, and considering the foregoing circumstances, your failure to pay Mr. Nishida's second installment of his tax liabilities is not entirely your fault and therefore legally justifiable. Therefore, your request for waiver of surcharge and penalty is hereby granted but not the payment of interest imposed under Section 249 of the Tax Code of 1997. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue