Penalty Imposed in Case of Failure to Pay the Tax Within the Time Prescribed

June 19, 1989 BIR RULING NO. 129-89 248 (a) (3) 000-00 129-89 M a d a m : This refers to your letter dated September 16, 1988 requesting a ruling as to whether the penalty equivalent to 25% of the amount due in addition to the tax required to be paid in case of failure to pay the tax within the time prescribed for its payment pursuant to Section 248(a)(3) of the Tax Code, as amended shall apply to deficiency tax collected from field investigation. cdtech It appears that the Revenue District Officer of Revenue District Office No. 31, Mandaluyong, Metro Manila issued a Memorandum dated September 9, 1988 to the Asst. Revenue District Officer, Group Supervisors, Revenue Enforcement Officers and others concerned pertinent portion of which reads as follows: xxx xxx xxx "Pursuant to Section 248 thereof, in addition to the tax required to be paid, the penalty equivalent to 25% of the amount due shall be imposed in case of failure to pay the tax within the time prescribed for its payment. This also applies to deficiency tax assessed after investigation ." In reply thereto, I have the honor to inform you that pursuant to Section 248(a)(3) of the Tax Code, as amended, a civil penalty equivalent to twenty-five percent (25%) of the amount due shall be imposed in addition to the tax required to be paid in case of "failure to pay the tax within the time prescribed for its payment." A deficiency tax assessed after investigation presupposes that the taxpayer failed to pay the correct amount of tax within the time prescribed for its payment, hence the deficiency. Accordingly, the penalty equivalent to 25% of the amount due in addition to the tax required to be paid shall be imposed not only to a deficiency tax where a formal assessment notice has been issued therefor but even to a deficiency tax ascertained after investigation. This revokes BIR Ruling No. 248(a)-000-00-483-88 dated October 6, 1988. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner