Request for Waiver of Penalties for Late Remittance of Withholding Tax

November 27, 2000 BIR RULING NO. 065-00 248 000-00 Office for Southern Cultural Committee 2/F A.B. Sandoval Bldg. Corner Shaw Blvd. And Oranbo Avenue Pasig City Attention: Mr . Ulysses A . Brito, DPM, CESO III Regional Director Gentlemen : This refers to your letter dated May 27, 1997 requesting for waiver of penalties for late remittance of your April 1997 withholding tax. HcDaAI It is represented that you had no prior knowledge of the Bureau of Internal Revenue's new tax collection system and that you learned of this Joint Circular No. 3-97 of the Department of Budget and Management and the Department of Finance only last May 22-24, 1997 when your accountant attended the 48th Convention/Seminar of the Association of Government Accountants of the Philippines (AGAP) at Bacolod City. In reply, please be informed that the taxes deducted and withheld by the withholding agent shall be held as a special fund in trust for the government until paid to the collecting officers pursuant to Section 58 of the Tax Code of 1997. Moreover, paragraph 2 of Section 2.58.1 of Revenue Regulations No. 2-98 implementing Section 58 of the Tax Code of 1997 provides that "xxx xxx xxx "The taxes withheld by the withholding agents shall be maintained in separate accounts and should not be commingled with any other funds of the withholding agent. They shall be considered as a trust fund held for government until they are remitted." Finally, under Section 248(a)(1) and (3) and 249, both of the Tax Code of 1997, the imposition of the surcharge and interest on delinquency is mandatory. Strong reasons of policy support a strict observance of the rule regarding the payment of tax. The laws imposing penalties for delinquencies are clearly intended to hasten tax payments or punish evasion or neglect of duty in respect thereof. If delays in tax payments are to be condoned for light reasons, the law imposing penalties for delinquencies would be rendered nugatory and the maintenance of the government and its multifarious activities would be as precarious as taxpayers are willing or unwilling to pay their obligations to the state on time. The imperatives of public welfare will not approve of this result. (Jamora vs. Meer, 74 Phil. 22) In view thereof, your request for waiver of penalties for late remittance of April 1997 withholding tax is hereby denied for lack of legal basis. Very truly yours, (SGD.) DAKILA B. FONACIER Commissioner of Internal Revenue