Denial of Request for General Amnesty to Barangays for Delayed Remittance of Withholding Tax Payments

July 22, 1999 BIR RULING NO. 111-99 111-99 Hon. Natalio F. Beltran III City Councilor City Council, Manila Rm. 442 City Hall Manila S i r : This refers to your letter dated 20 January 1999 appealing for the grant of general amnesty to all Barangays in the City of Manila in connection with the penalties imposed on delayed remittance of withholding tax payments by the said Barangays. It is represented that there are 895 barangays in the City of Manila which were constituted as government withholding tax agents; that the barangays have encountered numerous problems in remitting withholding tax payments with the accredited agent banks; that due to inadequate information dissemination on the implementing guidelines and procedure in remitting withholding tax payments as well as the monthly reportorial requirements, most of the barangays have received notices of penalties; that such problems were aired to the Withholding Tax Division of this Bureau; that the barangays have no intention to defraud the national government through non-remittance and delayed remittances of withholding tax payments; that therefore, it is requested that all Barangays in the City of Manila be granted amnesty from paying penalties in connection therewith; that such request is likewise embodied in the Liga ng mga Barangay-Manila Chapter Board Resolution No. 14-01-99 duly signed by the Liga Board Officers. LLjur In reply, please be advised that much to our regret, this Office is not empowered to grant a general amnesty in respect of any tax liability incurred by a particular class of taxpayers. Only Congress possesses this authority under its plenary power. However, pursuant to Section 204 (B) of the Tax Code of 1997, the Commissioner may abate or cancel a tax liability on a case-to-case basis, taking into account the presence of the statutory basis therefor, i.e., (a) when the tax or any portion thereof appears to be unjustly or excessively assessed; or (b) when the administration and collection costs involved do not justify the collection of the amount due. This means that any application for abatement of any tax liability, such as the penalties requested for by the concerned barangays in the City of Manila, would have to be appreciated on the merit of each individual case. As it is, this Office has already made official records or case dockets of certain liabilities incurred by the affected barangays. Thus, the cancellation of any of said cases, if merited, would require that a particular application be directed thereto by the affected barangay, citing the justifications relied upon. We therefore advise that the concerned barangays act accordingly with the assurance that this Office shall give preferential action to any application filed. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue