Application of Negotiable Land Certificate to Tax Payment Already Due

April 10, 1958 BIR RULING NO. 231-58 Messrs. Sycip, Gorres, Velayo & Co. Certified Public Accountants P.O. Box 589, Manila Gentlemen : Reference is made to your letter of the 7th instant, requesting information as follows: "Some of the officers of our client, Yutivo Sons Hardware Co., are holders of 'Negotiable Land Certificates' issued by the Philippine Government under Republic Act No. 1400, otherwise known as the Land Reform Act of 1955. Under Section 10(3) of said Act, the said certificates may be used by the holder thereof in payment of all his tax obligations to the government. "Sometimes next month, the above-mentioned officers will be receiving their bonuses from the company. They have expressed their desire to pay the withholding tax due from them by surrendering the corresponding amounts of certificates. In view of this, we would like to have your opinion whether or not the withholding tax due from the bonuses to be received by the said officers may be paid by them with their 'Negotiable Land Certificates' pursuant to the provisions of Republic Act No. 1400." In answer thereto, I have the honor to inform you that the taxes contemplated in Section 10 (3) of Republic Act No. 1400, to the payment of which the holder can apply his negotiable land certificate, are those already due. Accordingly, and as the amount deducted as withholding tax is a mere estimate of the income tax that shall become due at the end of a given year, the withholding tax deductible from the bonuses in question cannot be replaced with the respective negotiable land certificates of the recipients of said bonuses. cdta Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue