BIR Ruling No. 206-61

June 2, 1961 BIR RULING NO. 206-61 The Editor Philippine Virginia Tobacco Administration Manila S i r : Reference is made to your 1st Indorsement dated May 3, 1961 relative to the withholding of the independent contractor's and warehouseman's percentage taxes from the money payments you make to the Philippine Tobacco Flue-curing and Redrying Corporation, Northern Farmer's Exchange, Inc., and the Consolidated Tobacco Industries of the Philippines under the Philippine Virginia Tobacco Administration's redrying contracts with said corporations. In reply thereto, please be informed that the withholding requirement of R.A. No. 1051 is mandatory, as in fact, the law provides penalties for failure to withhold. The allegation of the PTFC & RC that its compensation at the time of payment is not determinable is untenable. It is determinable although it may be true that the determination thereof is difficult and may entail additional expenses. If at the time of every payment the exact amount of the tax cannot be computed, the nearest approximate thereof may be withheld provided that the total of the amounts withheld reflect the correct amount of the tax at the final liquidation of your accounts with said firms. Very truly yours, (SGD.) MISAEL P. VERA Deputy Commissioner of Internal Revenue