BIR Ruling [DA-423-98]

September 15, 1998 BIR RULING [DA-423-98] Department of Finance 7F EDPC Bldg. Roxas Blvd. Malate, Manila Attention: Ms . Lily K . Gruba Undersecretary Gentlemen : This refers to your letter dated March 25, 1998 requesting for waiver of the corresponding interest and penalties in connection with the late remittance of your withholding taxes for the months of January, February and March, 1997. cdta It is represented that the Department of Finance (DOF) had received a BIR's Audit Result Assessment Notice dated July 14, 1997 regarding final deficiency tax for the total amount of P842,120.49, including interest and penalty, the principal amount of which is P524,002.76, and another BIR Audit Result Assessment regarding final deficiency tax with the total amount due of P264,123.54, including interest and penalty, the principal amount of which is P160,833.91; that both assessments resulted from late remittances of withholding taxes for the months of February and January, respectively; that DOF had likewise received a collection letter without the BIR's Audit Result Assessment Notice dated December 15, 1997 relative to the March remittance amounting to P343,888.76, including penalty and interest; that DOF also admitted that although it has not yet received notice from the BIR, it was delayed in its remittances for the months of April and May, 1997; that accordingly, the reason for such delay was that the months involved, i.e., January to May 1997 were the critical period and the busiest months of the Department considering that it hosted the APEC Finance Ministers Meeting from February to April and the DOF Centennial Celebration; and that such delay was never intended nor was it caused by inefficiency considering that prior to January 1997, i. e., December 1996 downwards and after May 1997, i.e., June 1997 onwards, the DOF had been and is remitting its withholding taxes religiously. In reply thereto, please be informed that based on your representations, your failure to remit the subject withholding tax liabilities on time was mainly due to the activities which made the DOF so busy during those months which had direct connection to the cause of the delay. Considering, therefore, that the activities involved, which had focused most of the DOF's attention and effort, were all government related activities, this Office hereby grants your request for abatement of the 25% penalties/surcharges imposed on the late remittance of withheld taxes as provided for under then Section 248 of the Tax Code, as amended (also Section 248 of the Tax Code of 1997). However, you shall have to pay the corresponding interest accruing on such deficiency tax at the rate of twenty percent (20%) per annum until the amount is fully paid. We hope that this will not happen again, otherwise, we will be constrained to enforce against you all the sanctions provided for under our withholding tax laws, rules and regulations. It is suggested that to prevent any repetition of similar mistake, as a withholding agent and as the main agency which has direct control and supervision of this Bureau, the personnel in charge of this matter must have to know by heart his responsibilities and the consequential liabilities that may be enforced against DOF for failure to remit on time the withholding taxes required to be paid and remitted. You are hereby advised to remit the corresponding deficiency taxes assessed from you, in case you have not remitted yet. (BIR Ruling No. DA-137-98 dated April 13, 1998) casia Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue