BIR Ruling [DA-284-98]

June 29, 1998 BIR RULING [DA-284-98] Atty. Gregorio T. Luna, Jr. Provincial Secretary Tanggapan ng Sangguniang Panlalawigan Tandag, Surigao del Sur S i r : This refers to your letter dated January 20, 1998 addressed to the Hon. Alexander P. Aguirre, Acting Executive Secretary, Malacaang, Manila, which was referred to this Office on April 16, 1998 by Presidential Staff Director Nestor S. C. Caabay, relative to your query as to the effective date of Republic Act No. 8424, otherwise known as the Tax Reform Act of 1997, and the period of compensation income the same should be applicable. LexLib You stated that for the month of January 1998, your salary has been subjected to withholding tax computed based on the old tax rate and not under the new schedule as provided for under Republic Act No. 8424, thus resulting in a higher withholding tax deduction because the increased personal and additional deductions were not considered by the Provincial Accountant of the Tanggapan Ng Sangguniang Panlalawigan Ng Surigao Del Sur, allegedly upon advice of the Revenue District Officer thereat. In reply, please be informed that R.A. No. 8424 took effect on January 1, 1998 and applies to income earned beginning said date. Relative thereto, this Office issued Revenue Memorandum Circular No. 5-98 on January 22, 1998 which prescribed the manner of computation of taxes withheld on compensation income beginning January 1, 1998, taking into consideration the new schedule of income tax rates and the increased personal and additional exemptions provided for in Sections 24(A) (1) (c) and 35 of the Tax Code of 1997. It is highly probable that your Provincial Accountant may not be aware of said Revenue Memorandum Circular. Accordingly, and for the guidance of all concerned employees of the Provincial Government of Surigao Del Sur, we are enclosing herewith a copy of Revenue Memorandum Circular No. 5-98 dated January 22, 1998, together with a copy of the Revised Withholding Tax Table. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue